A new generation
Increasing industry diversity is likely to stem from younger advisers joining the profession. In this regard, the government’s apprenticeship levy may help to give adviser training programmes a boost. As of 6 April, companies with a “pay bill of more than £3m” have to contribute to the levy each month, charged at 0.5 per cent of individual firms’ annual wage bills.
Sian Fisher, CEO of The Chartered Insurance Institute (CII), suggests the levy will provide more opportunities for those who “don’t necessarily want to go the academic route”.
“With a lot of the training schemes, there’s quite a lot of energy in engaging with higher education colleges where there are diverse groups. It’s not just the usual suspects. There’s now something more definitive to go and talk to younger people about. I think it’s really helping the dialogue.”
However, not long after the launch of the apprenticeship levy, the government’s Education and Skills Funding Agency revealed it would be pausing its procurement process for up to 98 per cent of employers not eligible to pay the apprenticeship levy, in order to assess funding distribution and oversubscription issues.
Rebecca Stevenson, a trainee adviser at Ark Financial Planning in Manchester, was one of a number of budding advisers to have missed out on training due to the aforementioned changes.
Just a week before the Personal Finance Society’s (PFS) Aspire trainee programme was about to start in early May, Ms Stevenson was told, according to an email sent to her, that “despite considerable efforts and trying every possible angle, it has proved impossible to solve [funding issues] in time for the May start dates” due to a freeze in government funding.
Philip Stevenson, Ms Stevenson’s father and a chartered financial planner at Ark Financial Planning, is also frustrated by the lack of training and support for would-be advisers, as well as small to medium enterprises like his own.
Mr Stevenson says, “We took on a graduate trainee 10 years ago, which was unheard of in the industry at the time. The support we had for getting him qualified was non-existent. In the last 10 years, the average age of an IFA has gone up, the number of new recruits in the industry have gone down, and the number of women in the industry has gone down.”
Benefits to business
While many still view diversity as a social issue alone, studies have shown that real efforts towards creating inclusive work environments can produce extremely lucrative outcomes for businesses around the globe.
According to consultancy McKinsey’s 2015 report ‘Why diversity matters’, firms in the “top quartile for racial and ethnic diversity” across 366 public companies in the UK, US, Canada and Latin America were found to be “35 per cent more likely to have financial returns above their respective national industry medians.”
