What makes for a great career? For school leavers and fresh graduates, it can be hard to know. In the popular imagination, financial services equals rows of men in suits processing piles of paper.
That notion hasn’t been correct for many years, but it persists because the world of work can be slightly mysterious.
The young want employment that is personally satisfying, that makes an impact and provides a decent living, but the only thing they hear about that might tick all those boxes is, generally, being a doctor, or a lawyer.
That is why some fascinating careers, such as being a financial adviser, are barely on the radar of most young people. The importance of changing that is one of the reasons why the London Institute of Banking & Finance is part of the steering group of the New Talent Alliance, and is the secretariat for the group.
The NTA is a cross-industry working group within the Consumer Duty Alliance that exists to help and encourage younger people to become financial advisers and to help firms attract new talent.
If your immediate reaction to that is, ‘Uh-huh, don’t you offer qualifications in financial advice, isn’t this purely self-interested?’, bear with me.
I worked as a financial adviser for part of my career, which began in the 1990s. Financial advisers can make a very good living, but I’ve never met one who was in it just for money. They do it because they really value, and enjoy, helping people.
The satisfaction of seeing somebody overcome a significant financial challenge, or achieve some significant financial goal is tremendous.
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Fundamentally, it’s a career for a pro-social, people person and it’s one that the government wants to see grow.
Here's an example: a woman came to me for advice when she was buying a house. She didn’t have a family, so the only person she needed to worry about protecting was herself.
As she was quite young, critical illness cover was relatively affordable and she took it out. A year later, she was diagnosed with multiple sclerosis. The cover she had in place simply lifted away all the financial pressure she would otherwise have had to face.
No one ever wants someone to have to use a policy like that, but the knowledge that she was financially secure, when she might otherwise have been vulnerable, has stayed with me.
That is the sort of satisfaction that financial advisers work for. I thoroughly enjoyed my time as a financial adviser because I know I made a difference to my clients.
From the outside, financial advice looks like it might be heavy on the arcane details of financial products, on doing admin and on checking through sub-clauses – a little bit dull, in other words.
Providing financial advice is a regulated activity, so, yes, it does have to be done right. Mistakes, which can be costly, are to be avoided. But it’s also tremendously varied, with lots of different specialities, and it exists to help people get the best financial outcome they can.
Fundamentally, it’s a career for a pro-social, people person and it’s one that the government wants to see grow.
Why is the government keen on financial advice? Retail financial services offer many complex products that most people lack the time to really grapple with.
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The consumer duty rules set a professional bar of which we should be proud.
But, unless they are lucky enough to inherit a home, and also happen to have a defined benefit pension scheme, at some point (and much sooner than most of us think) everyone needs financial advice.
The consumer duty regulations, which have just come into force, aim to take some of the sting out of the complexity of retail financial services. But the regulations are not intended to do that by making the services on offer less nuanced or complex.
They will work in the interests of consumers by requiring firms to “act to deliver good outcomes for retail clients”.
All firms will have to: act in good faith toward retail customers; avoid causing foreseeable harm to retail customers; and enable and support them to pursue their financial objectives.
Importantly, they will have to make sure that consumers really understand what they have signed up for and they will also have to offer those consumers support.
Getting all of that right will mean having excellent financial advisers. Not all existing advisers are willing to face the challenge – or the threat of liability.
According to the Lang Cat Advice Gap Report 2024, 55 per cent of advisers who responded to the survey had already stopped serving clients because of the new consumer duty rules.
The reality, though, is that the consumer duty rules set a professional bar of which we should be proud.
Doctors are required to first do no harm. Financial advisers are now required to do some good.
Who wouldn’t want to be part of that?
John Somerville is director of financial services at LIBF