Salesman, IFA or Financial Adviser?

How strong is the sales aspect of an IFA or financial advisers role?  What percentage of the IFA or financial advisers role is taken up by actually selling financial products rather than financial planning?  These are both important questions that should be asked by new entrants into the financial services industry, particularly those looking to become financial advisers or IFA's.

For those professionals or graduates out there that are considering a career in financial services, the most likely route into the financial services industry is through a banking organisation.  Recruitment througout the financial services industry and certainly more so within bancassurance, is heavily focused on face to face sales skills and targeting of the financial advisory staff. Unfortunately, the financial services industry as a whole doesn't have an exceptional graduate intake like those of the merchant banking industry or the public sector, nor does it seem particularly interested in creating one.  This means that the preeminent route into the financial services industry and regulated sales is that of the banks.

Now, with the onset of RDR and the increasing transparency of the industry, the heavily sales focused financial advisory service provided by the banks retail arms doesn't sit particularly well with the cry for truely independent and unbiased financial advice.  Banks, when offering financial advice, by their very nature are biased towards offering their own products, they have to be.  Therefore, it stands to reason that the advice offered is perhaps tainted by a need for the financial adviser to acheive targets.  Of course, most if not all of the UK banking industry offer independent or IFA arms although they tend to be aimed at catering for the affluent. It is also however, very difficult for a newly qualified financial adviser or graduate/trainee to be offered a position within one of these segments.

What has to be realised for those seeking a career in financial services/regulated sales as a financial adviser or IFA is that there is a sales aspect to the role and most if not all positions will be targeted to a lesser or greater degree. How much of  a sales aspect the newly qualified financial adviser can accept is down to personal feelings.  Some will revel in the targeted environment and thrive on the peer recogntion it engenders, others will prefer the independent route, where perhaps the focus, although still sales orientated, leans more towards the financial advisory aspect and the nature of the financial planning advice proferred.  Each have their own benefits and pitfalls and its really horses for courses.  In my humble opionion the financial advisory industry as a whole is a sales industry first and foremost, the advice, whilst learning your trade as an IFA or financial adviser, comes second.

Polarisation - what effect would it have on the financial adviser recruitment industry?

Depolarisation - the rule that gave rise to the prominence of the Independent financial adviser or IFA has recently come under close scrutiny following the publishing of the Retail distribution review, the guidelines laid down by the FSA for the future of the financial services industry. For the layman, depolarisation legislation gave rise to the term 'independent' financial adviser by drawing a clear line between the differences in those who could offer truely independent advice and those who were working for companies offering their own financial products. Depolarisation also created a third type of financial adviser, the multi tied option. This basically means that the multi tied financial adviser, although not truly an IFA, can provide financial advice on a number of products from various providers, therefore offering a choice of sorts to those requiring financial planning advice.

Are we moving back towards a polarised financial services market and what differences will it make to the IFA and financial adviser of today and more importantly for those of us in the financial services recruitment market, the financial services industry ? Consumer protection was of course a huge motivating factor in the introduction of depolorisation legislation yet many recent studies have shown that consumers are not entirely concerned whether or not their financial adviser is truly independent or not and are more concerned that the products provided are the right financial products for them, with the right image and the right reputation. So, does this mean that consumers are apathetic towards financial planning?  I wouldn't have thought so but I would have expected the recent turmoil in the economic climate to have the effect of making consumers consider their choices more than they perhaps did previously although so far, studies have shown that isn't the case.

It is unsure as to what effect polarisation would have on the financial services recruitment industry and from the consumers perspective it seems to make little difference.  Multi tied advisers would simply have to become truely 'independent' financial advisers offering a choice from the entire market or 'tied' financial planners providing products from one provider, a salesperson in effect.  There shouldn't be a detrimental effect in the amount of roles available although in the short term, as companies within the financial services industry adapt there could be a small drop in the numbers of IFA's, financial advisers and therefore administrators and paraplanners required.  An equilibrium should however manifest itself within the medium term.  My opinion would be that short term it may have a relatively small effect but longer term, the financial services recruitment agencies would survive - we just wouldn't be working for multi tied organisations anymore. Simple really!