Advisers must stop bickering about whether independent is better than restricted and show a united front to promote the profession to younger entrants, according to M&G Wealth’s Tom Hegarty.
Hegarty, who is managing director at M&G Wealth Advice and chairman of the New Talent Alliance, told FT Adviser the age-old independent versus restricted advice debate must end otherwise the profession risked alienating those looking at a career in advice.
He added advisers needed to stop bickering among themselves on social media and other platforms because it was not a good look for those on the outside looking in.
“Advice comes in all shapes and forms, it always has done and the regulator allows and wants that because it all depends on what people's needs are,” he explained.
Hegarty said all different kinds of advice were needed, explaining that within M&G Wealth itself it had both a restricted and independent advice proposition.
“You could argue that with IFAs their advice processes take slightly longer because they've got to do whole of market research around suitability for clients, which means they probably can't deal with as many clients.
“Whereas a restricted advice business who's got a more simple proposition and slightly more streamlined technology processes can probably deal with more clients.
“Both of them have to meet suitability rules and regulator requirements for consumer duty around fair value, consumer support and understanding products and services.”
Hegarty went on to say some firms specialised in higher net worth clients and some focus on sports clients. “You cannot argue that one is better than the other, we need them all and we need more”.
New Talent Alliance
The New Talent Alliance which Hegarty chairs was launched earlier this year under the auspices of the Consumer Duty Alliance.
It aims to share good practice and expand initiatives already available to progress a career in personal finance by bringing together academies, training organisations, qualification bodies and recruiters.
Back in February, FT Adviser revealed the number of younger advisers fell over 18 months while the number of older advisers grew, raising concerns about the advice gap.
Data provided by the Financial Conduct Authority to FT Adviser revealed that as of February 2024 there were 174 advisers authorised to provide retail investment advice under the age of 25.
This is a significant drop of 60 per cent from August 2022 when FT Adviser found there were 426 retail advisers aged below 25.
Meanwhile the number of advisers aged over 60 grew from 4,824 in August 2022 to 6,210 in February 2024, a jump of 29 per cent.
To turn this around, Hegarty believes there are three things the advice profession should be doing.
Firstly, advisers need to show a united front and not be seen to bicker with one another over who has the better proposition.
“The one-upmanship needs to stop,” he said.
