In providing opportunities to ‘earn while you learn’, apprenticeships have the potential to bring greater diversity to professions such as financial advice.
The creation of degree apprenticeships in 2015 took that a stage further by enabling apprentices to obtain a degree at the same time.
This is the beauty of the new degree apprenticeships for aspiring financial advisers, developed by LIBF ─ part of Walbrook Institute London ─ and Future Financial Adviser (FFA).
Young people from less wealthy backgrounds may be put off the graduate route into the profession by tuition fees and mounting student debt. An alternative way in may attract those people who would otherwise be lost to the advice sector.
If you are presented with the opportunity to learn and earn, you should take it
However, the Education Policy Institute recently published a report whose findings show that, although degree apprenticeships in general have high achievement rates and positive labour market returns, they have not been effective at promoting social mobility.
Just 11% of degree apprentices came from ‘disadvantaged backgrounds’, compared to over 19% of all graduates.
So, can financial advice degree apprenticeships buck the trend to create genuine career opportunities for under-represented groups?
Lack of experience
Aspiring advisers say there needs to be a pipeline of talent that is representative of client banks.
“Clients come from all backgrounds. Some will have gone to university and others will not. I think the adviser pool in a firm should reflect that,” says Mattioli Woods trainee wealth management consultant Rishi Lad, who became an apprentice at age 17.
Most employers in all industries are seeking ready-made support staff who do not need anyone to hold their hand
Lad adds that a lack of industry experience is often a big barrier to entry for younger people – including graduates – who could bring diversity to professions such as financial advice.
“Sometimes employers require two, three or four years’ experience,” says Lad. “Friends and people I know who have graduated still can’t get a job because employers say they haven’t got the experience.”
This is one reason why Root Paraplanning’s apprentice paraplanner, Abdul Hadi, chose an apprenticeship rather than a university course.
“We’ve seen a significant drop in graduates being employed, especially in our industry, where applicable experience is much more important than what degree you have,” he says.
You have peace of mind that you’re getting experience, getting paid a very good salary and doing industry-specific qualifications
Without apprenticeships, experience is hard to come by, adds Hadi.
“I think AI has replaced a lot of graduate and intern work,” he says.
Financial strain
The financial burden of a university degree can deter some people from taking the graduate route.
Information from the Department for Education shows that maximum tuition fees in England are £7,145 a year for part-time courses, £9,535 a year for standard full-time courses and £11,440 a year for accelerated full-time courses. Not all families can help foot the bill at these levels.
“A lot of my mates have to work part time and juggle jobs with university work,” says Hadi.
In our industry, applicable experience is much more important than what degree you have
An apprenticeship was a no-brainer for him.
“As an apprentice you have peace of mind that you’re getting experience, you’re getting paid a very good salary and you’re doing industry-specific qualifications.”
New initiative launched to ease adviser shortage
Lad points out that only those who do a degree apprenticeship will obtain a degree.
But, says Root Paraplanning founder Stuart Stanford, other apprentices can reach a degree-level equivalent through professional qualifications.
“For those who are really committed and want to spend four years straight out of A-levels in the industry, they’re going to get the equivalent level [of qualification] that they would get if they were to spend on university tuition fees,” he says.
Some clients will have gone to university and others will not. I think the adviser pool in a firm should reflect that
Stanford points out that the cost of getting diploma qualified and becoming chartered ─ even if someone were to self-fund ─ is cheaper than going to university.
“I think apprenticeship schemes are a great avenue because you’re incentivising employers with support in putting apprentices through the scheme, and you’re giving new entrants to the industry the ability to learn very quickly,” he says.
Driving change
In Stanford’s experience, most employers in all industries are seeking “ready-made support staff” who do not need anyone to “hold their hand”.
He explains: “Most employers aren’t willing to spend the time teaching something like paraplanning, which requires a lot of investment in terms of time and money.”
Given that many advisers are looking for highly qualified and experienced paraplanners but cannot afford them, Stanford thinks employers will eventually have to invest in new talent, potentially through apprenticeships.
AI has replaced a lot of graduate and intern work
“The ‘low-hanging fruit’ of individuals who are well-qualified and experienced paraplanners is becoming few and far between,” he says.
Lad thinks apprenticeships have the potential to broaden the advice profession and lower the average age of advisers, which is currently mid-50s.
“The apprenticeship route is fantastic,” he says. “If you are presented with the opportunity to learn and earn, you should take it.”
Amanda Newman Smith is features writer for Money Marketing
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