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Endangered species? Why we desperately need more financial advisers

08 August 2019


Ruth Handcock, Chief Executive Officer for Octopus Investments, believes more young people would choose to become financial advisers if they understood the value of financial advice.  

CALLING ALL JOB SEEKERS: Would you be interested in choosing a profession where you spend your time helping to solve other people’s problems? Where you can be your own boss, work flexible hours that suit you, and you can expect to earn three times the average annual UK salary? As a job advert, it sounds almost too good to be true. But it’s a fair description of life as a qualified financial adviser. 

The problem is that most people who would be well-suited to this type of opportunity are completely in the dark about the enormous career potential of financial advice.

What do you want to be when you grow up?

In a new survey conducted by Octopus, we wanted to find out whether financial advice was viewed as a credible career path for young people currently studying. Plus, we asked the same questions to those already in work but who are open to the possibility of switching careers. Our findings, on both accounts, were quite alarming.

Students are missing out on a great career path

First, we asked more than a thousand students aged 18-21 about whether they were considering a career in financial advice. Just 9% of the students we heard from told us they would consider financial advice as a career, and more than a third (36%) said they don’t know what a financial adviser does. 

When we delved deeper, the students told us what was holding them back from working towards a career in financial advice. Of those we surveyed, 37% told us they didn’t think their personality was suited to the role, while 23% said they didn’t want what they perceived to be a ‘corporate’ office-based job. 

But after we explained what the role of a financial adviser entails, a much higher proportion (43%) said they would be willing to reconsider. Students then highlighted that financial advice could fit with their top job criteria of high earning potential (51%), problem-solving (49%), flexible working (43%) and the ability to make a real difference to people’s lives (39%). 

Why don’t more people switch careers into financial advice?

It’s a similar story across the people we surveyed who are already in work. While 73% said they would be open to considering a career change in the next five years, only one in ten said they saw financial advice as a viable career option. One in five (18%) told us they didn’t know what a financial adviser does.

Clearly, there’s a bigger issue here, where the majority of people in the UK simply don’t have an accurate understanding of what financial advisers do. That’s because not enough people are choosing to seek out financial advice, and are therefore failing to recognise the benefits of long-term financial planning. For example, there is a misconception that a financial adviser is little more than a salesman and this needs to be consigned to history; the true value of a financial adviser lies in solving problems, not selling products.

Most people don’t seek out financial advice

According to research published in 2018 by the Financial Conduct Authority, more than nine out of ten Britons don’t currently consult a financial adviser. It’s not really surprising, then, that financial advice is misunderstood as a concept and so widely undervalued as a career. 

The lack of demand for financial advice is reflected in the number of people currently in the profession. Right now, there are only 26,000 financial advisers across the UK. According to the Office for National Statistics, that works out as just one adviser for every 2,000 adults.

Are financial advisers an endangered species?

This number is set to drop even further in the coming years, as thousands of financial advisers are set to retire and/or leave the profession. As part of our research, we spoke to more than 200 financial advisers. One in three (29%) told us they plan to retire in the next five years, and 58% said they would be leaving the advice industry within the next decade. If we as a nation don’t start doing more to encourage the next generation to fill their shoes, we could find ourselves facing an advice black hole.

It starts with taking financial advice seriously as a profession

People will always need access to good quality financial advice at different stages of their lives. Yet despite the professional status of financial advice (you need to be fully qualified in order to be able to offer it), most people simply don’t view financial advisers in the same light as they do other professionals, such as doctors or solicitors. At Octopus, we think it’s time this misconception was addressed. And it starts by championing – and shouting loudly about – the benefits of financial advice. 

We work closely with thousands of advisers across the UK, so we know that one of the most valuable – and irreplaceable – aspects of financial planning is the way that it can completely change the way a person thinks about money. 

Challenging people’s perceptions

Financial advisers are experts at understanding human behaviour and solving problems. They ask the questions that reach deep into someone’s core, to work out what matters most to them. We just wish more people in the UK had the opportunity to experience this deeply personal and human connection for themselves.  

We need to start raising awareness, by demonstrating that financial advice isn’t just a hugely rewarding career choice; it’s a vocation. It’s a role where you get to make an impact on a daily basis, by helping people plan for the future and make life-changing decisions. At a time of economic uncertainty, there’s a huge opportunity to reposition financial advice as a career path built on trust, empathy and unlocking human potential. 

If we can get this right, then future generations will truly value financial advice, both as a career path and as an indispensable means of achieving their life goals. 

Ruth Handcock is Chief Executive Officer for Octopus Investments.