‘We need numbers’: Firms’ reluctance to PY advisers hindering growth

On the latest episode of The ifa Show, industry academic and consultant Dr Katherine Hunt argued that, in order to grow and strengthen the voice of the advice profession, there needs to be more focus on growing its successors.

“We need numbers. The reason we need numbers is because we need voting power, basically lobbying. The more numbers we have, the bigger a community we are, the bigger a profession we are, the better off we’re going to be. We need numbers for long-term sustainability,” Hunt said.

“So, where are those numbers coming from? The leaders in 20 years’ time, what does their flow through look like? And part of that has to include the PY (professional year) because that’s the current structure that we’ve got.”

While there are many great advisers in the profession, Hunt said through conversations with these advisers she found there is a lack of enthusiasm for providing the training grounds for up-and-coming talent.

“When it comes to, what does succession planning look like? The conversation turned, in 10 of the cases, it turned to, ‘That’s not our business model right now. We don’t have the capacity to supervise PYs in terms of what our business is looking like. So, what we’re doing is we’re paying really good salaries for advisers that, they’re already awesome. They’ve been trained. They’ve already had their own clients with other firms. That’s what we’re doing for our businesses’,” she said.

“And the fact that it happened 10 times, I was thinking, this is so curious, right? Because it is a business model. You can’t argue. You can’t say, ‘Oh, but you should take on PYs’. It’s like, no, if that’s your business model and you think that’s where your business is going to thrive and help more clients then that’s just the fact of the matter.”

However, Hunt said that if lawyers or accountants conducted themselves in a similar way, they would be “looked down upon” by their peers because actively contributing to training the next generation of professionals is simply the status quo for them.

Despite believing that it will take a collective effort to teach the next generation, Hunt suggested that, at least to begin with, only those who are truly committed to the cause should be taking up the mantle, with those less inclined with the process to leave it be for now.

“I think a little bit of that process has to be the self-reflection of, where does my ethics fit within the actual sustainability of this profession? Am I interested in this profession being around in 20 years’ time? Is that a concern of mine or do I have other concerns?” she said.

“Because we want to make sure that, at least initially, while this culture of bringing on the PYs is really bedded down or developed into our sector, that it is the keen and the enthusiastic who lead the way.”

To hear more from Katherine Hunt, tune in here.