Their number is decreasing. The work seems either unattractive to young people or hard to break into, with just 261 advisers under the age of 25.
Many IFAs are over 50 and succession planning is often nonexistent. Yet this sector is a beacon in world of scammers and fraudsters.
Since the 2015 pensions freedoms, advice services are needed more than ever. The median household net worth in Britain is £302,500, yet just a tiny minority of people take regulated advice.
IFAs know the value of the services they give their clients, but sadly few spread the gospel to the outside world. They do not need to try. Most have more than enough clients and are turning people away as many begin their retirement journey. The IFA sector is imploding.
But who is there to inject new Iife into a valued industry? The brand messaging is poor – ask your friends and family, do they know the difference between an independent financial adviser or firms that offers restricted advice like Hargreaves Lansdown or St James’ Place or indeed appointed representatives?
I have yet to meet one young university graduate whose ambition is to be an IFA, although this can be an intensely rewarding career, with IFAs not only sorting out money issues but sometimes being unheralded life coaches.
Martin Lewis, the personal finance guru on ITV, has a deservedly terrific reputation as a consumer champion with lots of new bloggers trying to emulate him. But this should and could be your role, not that of a TV pundit.
If IFAs were held in high regard by the general public as consumer champions, rather than simply there to help max out on the latest higher rate tax loophole, the sector would attract new blood and fresh thinking that could revolutionise its long-term prospects.
Some IFAs do loss-leading pro bono work but they do not trumpet this side of their lives. Many are too busy servicing their existing clients to take on more so pro bono is not often done.
That impecunious 25-year-old on £20,000 a year thinking about his or her first pension plan or saving for a mortgage could become tomorrow’s multi-million pound entrepreneur. Sadly, the very people who can gain the most from an IFA can least afford it, with standard pension planning costing around £200 an hour.
The industry is all too fragmented with a confusing set of acronyms and poor branding. Think of the barrister’s wig and gown – old fashioned it might be but it sends a powerful message that they are our advocates in court.
