Self employed financial adviser - Is now a good time?

Its a given that the economy although experiencing some green shoots of recovery, hasn't reached the levels of stability that we achieved 2 years ago. So, taking into consideration, the instability and the uncertainty with regards when exactly full recovery will ensue, is taking the leap of faith and becoming a self employed financial adviser a viable option?

What we at XL Recruitment are seeing in the UK financial services market is that financial advisers who have historically maintained quite good income levels are now leaning towards employed opportunities and positions that offer the stability of a monthly basic salary. Bancassurance financial advisers are one such role that is becoming a more sought after position. Never the less, the self employed IFA position is one that offers a fantastic longer term opportunity.

For many of the AR's(appointed reps) who have established client banks and a good business model from which to work, the economic situation hasn't drastically altered their position. The Independent financial adviser in some respects is in a unique position in that their business is not perhaps as reliant on consistently generating new business as in other industries. Recurring or trail income and a client bank built up over the long term offers a financially stable footing for the IFA from which to operate, lessening the need for continual new business.

As an Independent financial adviser working on a self employed basis, as long as there is a consistent structure in place and a support framework leading into RDR that affords a certain level of assistance with qualification, compliance, TCF, etc there should be no reason why, even throughout the current economic conditions, a stable business cannot be built. There are varying degrees of self employment and we at XL Recruitment would certainly suggest that as an adviser considering this option, at least initially, the options looked at should be ones that offer a good level of support in terms of lead generation and back office support. There are many self employed financial adviser roles out there that offer the earth and supply very little so it does pay to research thoroughly but some can pretty much do what they say on the tin. These are the self employed IFA roles to look at.

So, is self employment a good option for an IFA at the moment? As long as the company can offer a sound framework to work within leading into 2012 and the implementation of RDR review and provide a good level of support whilst getting the business off the ground, yes, it is a good option. Many now pay a draw or salary guaranteed against further commissions so financially there isn't an issue and once the business is up and running as long as the IFA is proactive in terms of generating new business and establishing a presence in their locale amongst potential clients, there shouldn't be any problems. in fact, the business should be well placed to do thrive once the economy picks up.

The Recruiter - Friend or Foe?

The Recruiter in financial services is a much maligned and often misunderstood role. Financial adviser candidates who have placed their cv's on job boards, due to current economic conditions, are saturated with calls from financial services headhunters hawking their positions, candidates that have been actively headhunted regard the financial services recruiter as a nuisance, a conversation that is best avoided, potential employers regard the rectuiter, again as a pest, a necessary evil when there is a lack of quality financial adviser candidates in the market but one to be tolerated and kept at arms length for most of the time.

The financial services recruiter plays an important part in the employment market and takes a lot of the strain from employers and employees alike. Yes they have to actively headhunt potential candidates for clients that want succesful people - who by the way tend to be entirely happy in the job they are already doing - and yes they do approach the potential employer with a view to exposing them to the usually pre qualified candidates on their books. Thats what a financial services recruiter does - proactively matches candidate to job and employer to potential employee.

If there weren't any recruiters where would companies such as Lloyds bank, HSBC and Wesleyan be? The likelihood of them finding the right number and calibre of financial adviser or IFA from the local newspaper is minute, the adverts just wouldn't get the exposure. The larger blue chip financial services employers make easy bedfellows for the financial services recruiter - they are highly aware of the value of a good recruiter and will strive to offer enhanced opportunity to those financial services recruiters they trust, hence the existence of the Preferred Supplier List or PSL which gives the recruiters who provide the best results, the opportunity to work on jobs exclusively.

It most defintely tends to be the smaller companies that have an issue with the use of a financial services recruiter. For some it will be purely monetary concerns - a good recruiter can charge up to £10,000 for a highly qualified financial adviser or IFA - and for some it will simply be the principle - why should they use a financial services recruiter when they can do the job themselves?

Lately, we have seen a number of the smaller IFA organisations, accountancy practices and generally smaller concerns realising that the financial services recruiter is perhaps of more value than at firdst thought. Companies that have been historically loathe to use a financial services recruiter, are now understanding that most offer a cost effective, professional service that will often match an employer with the right candidate within one or two potential candidates, saving man hours, advertising budget, time and money.

So the Recruiter, is he friend or foe? looking at what the good financial services recruiter can offer, I would be inclined to say friend but then of course I would say that - I am one!

Financial professionals report a market surge in property sales

Supposedly, the Property market is showing clear signs of recovery. What this signifies for the financial services industry and the financial advisory and mortgage advisory markets , it is too early to tell. Longer term stability in the financial services arena is still elusive and financial advisers and mortgage advisers will start to see a clearer picture I feel towards the end of the year.

The headline stems from the fact that, the Agency Express Property Activity Index,a measure for the property market in general, which is based on the use of 'For Sale' and 'Sold' boards across the UK is currently revealing that the number of 'Sold' signs instructed by estate agents last month rose to its second highest level since the same time last year.

The use of 'Sold' signs increased negligibly in May, although 1.2 per cent, compared to the previous month and a massive 123.2 per cent on December's low. March has been the only month so far to have a higher level.

The thing is, May's new 'For Sale' board activity was still significantly down, 44.6 per cent on May last year and 63.6 per cent down on May 2007 - the highest recorded month in the last two and a half years. So are we really seeing a significant recovery? Or is it just a dead-cat bounce? Mortgage advisers, I'm sure, will have their own idea's.

The Agency Express Property index has also reported a just over 2 per cent increase from April to May in the number of 'For Sale' boards being erected. Now obviously this doesn't mean that all those houses will convert to sales, however, it does give an indication as to the thoughts of homeowners and whether or not they are seeing a recovery.

This is the fourth month out of the last five that the number of new 'For Sale' boards has increased on the previous month. Personally I think that its more than likely wishful thinking on the part of the consumer, especially given the difficulties still faced in securing a new mortgage. You're going to find it hard to sell your house if the person trying to buy it is unable to secure a mortgage! Many financial advisers are reporting that its still virtually impossible to find lenders that will release money to people with a less than squeaky clean credit rating and less than a 40 per cent deposit - and lets face it, the amount of people that can raise that capital are pretty thin on the ground.

Regionally there are differences in the amount of boards being moved from 'For Sale' to 'Sold' with the largest increase coming from the affluent south east. Reporting a 26 percent monthly rise it is followed closely by Scotland with 23 percent. Conversely there are also regions that are perhaps not faring so well with increases in 'For Sale' signs but no convergent increase in 'Sold' signs and these include both the East midlands and London with Yorkshire next up.

Despite the still turbulent economy and the shaky lending practices some Estate agencies, mortgage advisers and financial advisers are saying that properties are still being sold and more so than they have been for the last 12 months and there are definitely more and more people that are deciding that this is the time for them to try and sell their house.

Also the Agency Express Property Index is confident that because their information is taken from the beginning of the house sales process that it gives a good indication of activity and the way the market is swinging, this will also be reflected further in three or four months time.

As a financial services recruitment consultant I certainly hope so. Any upswing in the financial services market is a good thing for us - it brings about movement in the job market and more jobs are created in the mortgage advisory arena particularly. Because of our focus this is the indicator we are more inclined to use as a more stable measuring tool of long term stability in the financial services industry and it will afford us a better picture of the financial services industry in general. The recruitment industry in this sector, have however, reported a small increase in the number of opportunities available for financial professionals across various arenas, seeming to indicate some sort of recovery across a wider area. We can only hope so!

Redundancy - Law of the Jungle?

Redundancy as a word seems to be rearing its ugly head more and more as we come to the end of the first quarter of the new financial year. But does it hold the same fear as it did twenty years ago, or when the last depression took hold.

As a recruitment consultantancy in the UK financial services industry, we are seeing people displaced at an almost scary rate but is it just the law of the jungle? Using that terminology, in lean times, the herd sacrifice the sick or weak animals for the greater good of the rest, streamlining and making more efficient the smaller group. I believe that this is what we are seeing now in the financial markets.

We have the larger blue chip financial companies shedding the financial professionals that are just reaching retirement age anyway, 'there you go, you gave us 20 years great service, there's a golden farewell' or the ones that are just not performing as they should - 'targets not reached in quarters 3 & 4 - there's a reference, close the door on your way out!' And its not just support staff or back office administrators. Historically, the last people to go when the economy slows have usually been financial advisers or sales people, however, over the last year these have been let go just as rapidly.

You might, after reading the first two or three paragraphs be thinking that its all doom and gloom. You would however, be wrong. Although the banks, financial organisations, IFA's, etc are getting rid of people - as fast as they are getting rid of the older and non performing individuals they are looking to take on new, younger, high volume, high achieving professionals. We at XL-Recruitment are seeing a trend developing of financial services organisations screening very heavily in order to filter out the best. Now this is a good thing although you might ask why?

From a recruiters perspective it means that a lot of the agencies that have, over the last year or two grown fat on the reactive work of job sites, etc will now have to revisit skills that they didn't have to use in a buoyant market - cold calling, headhunting, additional marketing, business development - proactive skills that have to now be brought back out, dusted off and polished once more in order to find the advisers that are successful - usually not the ones looking for jobs. A lot of consultants who have only worked in a buoyant financial services market won't even have these skills. This is why we are now seeing, as in the financial advisory arena, recruitment consultancies in the financial sector shedding staff just as quickly.

From a financial professionals perspective it means less competition and a clear run at a reduced amount of business, which should mean target achievement and therefore bonus. For the smart financial adviser who's performing consistently, now is the time to be pushing your case for a sales management role or senior advisory position, you're the ones still there, you're the ones performing, you're the ones worth £millions to the organisation you work for.

So, redundancy, is it a dirty word? Not if you're doing your job to the best of your ability it isn't!

Old hand, New Rules?

In my role as a financial services recruitment consultant I recently held a conversation with a highly skilled and fully qualified financial adviser who had been working abroad for a number of years in a non UK regulated, financial services market. Now, as a financial adviser he was clearly very skilled and had the relevant FPC qualifications from this country but he was experiencing difficulty getting back into the financial services industry as he didn't hold CAS status.

Certainly as a financial services recruiter I am seeing this more and more. As the economy contracts in other countries, financial advisers who left the UK to go and work in lucrative markets abroad are now looking to make a return to what they know - or so they thought.

With the onset of the Retail Distribution review and the surge in TCF the financial advisory landscape is perhaps even more rugged now for these people than it was a few years ago.

With the UK economy still in turmoil, financial services employers have difficulty justifying the expenditure of taking someone on who isn't going to hit the ground running so if they have to be signed off as competent, with the hours of observed meetings, compliance, etc that it takes, is it any surprise that many are reticent to do it.

There must be a better way of bringing people who are well qualified, highly professional and in most cases, very good at their job, back into a financial services industry that at the moment could do with all the fresh blood it can get.

For a financial adviser coming back to the UK from other markets abroad there are basically two options - 1) You go directly authorised under the protective umbrella of a network. In a lot of cases you won't get client support, you're self employed with no guaranteed income and of course there's no guarantee that your business will be successful, which will leave an unpleasant paragraph on your CV or - 2) You go back in on the ground floor as a trainee with a large organisation - many of which won't sign you off as CAS until they've had their moneys worth, as a trainee your salary won't be anything to write home about and for a financial adviser who has been relatively successful it can be demeaning to have to take not one but a few backwards steps!

I think there's a vastly underused commodity out there for the financial services industry and there must be a way they can be fast tracked back into a role that most are very good at and are clearly qualified for. Answers on a postcard!

When will the banking market return?

With today's(29th April 2009) recent surge in first quarter profits posted by Santander and the Abbey Bank in particular, are we starting to see the first green shoots of recovery in the banking environment and therefore the financial services recruitment industry? I am no economist and can only give a recruiters view on the situation but recent events do seem to indicate that we are perhaps starting to see a small increase in profits generated by financial services organisations, which should theoretically bring with it an increase in the amount of recruitment undertaken by the banking industry.

The stock market experienced a small rise on the back of the banking markets better than forecasted pre tax profits and this indicates a small but significant recovery. Of course, with the UK economy still in the mire of a supposedly full scale depression it could be a long time yet before we start seeing any upturn in the financial services recruitment market but it does however bode well for the latter part of 2009, despite the government telling us that 900,000 people will lose their jobs this year.

The recent increases in first quarter profits aren't quite across the board as yet and the mortgage market in general is still depressed but increased profits must mean increased consumer confidence and a slight easing on the restrictions in lending policy, which in turn will bring a need for an increase in financial advisory and mortgage advisory staff. Is quantitative easing beginning to take effect? Who knows, but after a year of headcounts and financial advisory positions being severely restricted any amount of recovery, however small, would be most welcome.

Working in the UK financial services recruitment industry, reliance on the 'big four' high street banks for financial services roles and the resulting lack of opportunity has brought about a heavy downturn in profitability. This has been offset by increased business development and marketing in order to generate alternative business from IFA organisations, Accountancy practices and assurance providers which has to a degree worked. However, the staple of most financial services recruiters is the banking environment and the financial advisory opportunities they bring, the holy grail of the PSL still being the aim, however,what good being on a PSL does if the jobs just aren't there, I don't know?

Speaking from experience, we have seen a small increase in jobs from the financial adviser or wealth management arms of the High Street banks very recently, resembling a small chink of light in the economic gloom. Hopefully it will increase and continue into the latter part of the year. And, if it manages to get back to resembling anything like it did last year in terms of the number of opportunities, both I and XL Recruitment will be happy bunnies!

Marketing 101

Marketing - Not really a part of the business that many paid attention to up until last year. For much of that time new accounts were a nice addition to the accounts already held and not, as this year, a vital necessity. Much of the marketing we at XL Recruitment did last year was via word of mouth and it wasn't really deemed a priority- perhaps not the best plan for business growth - but then, we are already providing financial advisory staff to the majority of the blue chip companies in the UK, along with a multitude of the national IFA and assurance organisations up and down the country.

Things have changed. The contracting economy and diminished returns from existing business have made it absolutely essential that we market ourselves to new potential clients- getting ourselves and the XL brand exposure to new contacts on a weekly, if not daily basis. It will be the same for any financial professional whatever discipline - whether an IFA, financial adviser or mortgage adviser. The principle won't change - it will still involve you marketing yourself to a new audience with a view to acquiring new business.

As a recruiter working in the financial services industry we are only now starting to take a look at the myriad ways to market ourselves - something we should have been prepared for and up to date with a while ago, certainly it would have helped. With the Internet well established, nowadays there are so many different tools to create exposure for you and your brand and its important to know what works for you and what your potential clients will use in order for you to create a proper targeted media campaign.

Marketing is of little use if its done in an unfocused and scatter gun manner. Its not enough to just create a business profile on Facebook and send out a thousand email newsletters. Its vitally important to put a disciplined plan in place. Think about where your clients come from, what websites and media they will use. You need to focus on those areas.

Its also really important that you can measure what you are doing - its no good throwing money around on marketing that doesn't work. Again, choose what will work and spend time, money and energy on that. If seminars worked before - use them again, if you had success cold calling - get back on the phone - just make sure its to the market that you need to be targeting, not a random section of the population.

The most important things to do are to:

1. Determine what resources you can use in terms of time, energy, money and people and that will give you an idea of what can be done.


2. Determine who and what constitutes your target market? You have to find out who your audience are before you can think of what to deliver to them.


3. Think about what your strengths are - its no good getting up in a seminar and delivering a pitch if you're not very good at it or not confident with it. Choose what you are good at and focus on that - the more confidence you have in what you are doing - the more likely it is you will get better results.


4. Always be prepared to use something that you haven't before. Don't discount something just because you haven't used it - it could be a hugely effective marketing tool- Always look at things with an open mind.

Its more important than ever that we use marketing to get the best results we can and no business plan, whether personal or part of a bigger picture, will succeed if it doesn't involve at least a modicum of marketing nowadays, especially in the financial services industry.