There was a LinkedIn poll earlier this year from NextGen Planners asking how old people were when they started a career in financial planning. The vast majority – 60% – were under 25 and a further 35% were between 25 and 40. That meant a tiny fraction were over 40.
Starting a career in financial planning does not necessarily mean being a financial planner – there are plenty of people employed as administrators or paraplanners which will have a lower age profile at entry. Many people are also ‘second careerists’ who become financial planners after building careers in other fields and these people are likely to be older.
But the results of NextGen’s poll do suggest there is perhaps an optimum age range for becoming an adviser, even though there is no concrete ‘cut-off’ age. So, is it ever too late to become a financial planner or are there practical considerations that, in effect, create a ceiling in terms of age at entry?
Life experience
Some jobs are a natural fit for a career change to financial planning. For example, retired sports people or ex-military personnel often have transferable skills that suit financial planning and age does not seem to be a barrier.
But it may have a lot more to do with the kind of person you are as you age. Ellen Langdon, founder of St James’s Place (SJP) partner practice Ellen Langdon Financial Management recalls seeing a news story on TV about a couple in their 90s emigrating to Australia who were shown at the airport with their bags packed.
“That really resonated with me,” she says. “Is it ever too late to do the things we want to do?”
Langdon started her career as a nurse, following in her mother’s footsteps at the age of 17. A move into marketing followed, with Langdon running her own business before going back in-house when she had her children. She had a leadership role in marketing in local government before joining the SJP Academy.
“It came to a point where the marketing department had to reapply for their own jobs and I thought this may be a chance to do something new,” she says.
That ‘something new’ prompted a move back to her native Edinburgh and doing an MBA, which steered her career towards financial services.
One of the advantages of becoming a financial planner later in life is that you will have more life experience than someone younger and are able to bond with clients over shared experiences like having children or buying a home.
“I’ve been through a lot of these life stages myself, so I understand what clients are facing,” says Langdon. “I know people have kids and don’t have a lot of money, but I also know when the kids are grown up, they will need some money. We build a plan around that to help them and life experience helps.”
This is not to say younger advisers will struggle to build a rapport with clients who are older than they are, as relationships can be built on other things such as a shared interest in sport or the arts. But having personal experience of a life event or a personal issue can be a powerful way to build trust among clients of a similar age.
Progeny chartered financial planner Mark Perkins served 26 years in the Royal Navy before becoming a financial planner in his early 40s.
“Being a bit more mature and worldly wise meant I was not a dissimilar age to most clients and could relate to most of the situations I came across,” he says.
He also found building a rapport with people came quite instinctively, which is useful when advisers need to have difficult conversations with clients.
“I’m not sure I would have been able to handle the role in my early 20s and I’m full of admiration for the young advisers in our in-house academy,” he says.
Perkins says there are obviously benefits to being a younger adviser, such as building relationships with clients that can last for decades and attracting a younger generation of clients. But he feels the profession still needs older new entrants.
“Our industry is all about people and we need a diverse range of professionals to cater for a wide range of clients, so age should not be a limiting factor,” he says.
Barriers
There is nothing to prevent anyone of working age becoming an adviser based on age alone. However, it would be naïve to suggest there are no potential barriers for those who come to the profession late.
The older someone is, the longer it is likely to be since they have taken an exam. Exams are a necessity because advisers need to be at least level 4 diploma qualified, but it can be daunting for older people to return to studying after a huge gap.
Even if someone has, like Langdon, dipped their toes into studying again, the diploma qualification is often a different experience.
“I found the exams hugely challenging, but it’s just about looking at the end result,” she says.
The approach that worked for her was to take it in her stride, one exam at a time.
“It’s the same with anything – client meetings or presentations. You think, ‘How am I going to get through it?’”
Talking to people who have gone through it, taking on board their advice and getting support from employers or academies can help older entrants to the profession adjust but some still might have reservations.
“Exams do not measure how great you are with people, but you still have to sit them and that could put a lot of people off,” says Finn Houlihan, founding director of The Arlo Group and ATC Tax.
“People do struggle with exams the older they are. It’s daunting if you haven’t done exams in 10, 20 or 30 years but, if you’ve recently been to university, you’re more likely to think, ‘Bring it on.’”
However, Houlihan points out that, since lockdown, the process of sitting the exam has become more relaxed.
“You can do exams under remote invigilation, so they are less daunting,” he says.
According to Unbiased.co.uk founder and chief executive Karen Barrett, the most important thing is having the right attitude.
“Passing the necessary qualifications is obviously essential, but there’s more to being a successful adviser than just gaining knowledge,” she says.
“Of those who fail to make the grade, it’s rarely because they couldn’t grasp the technical stuff. Having excellent communication skills and a strong capacity for empathy are more important.”
Another potential issue for people coming into the profession later in life is that if you have built a career in a different field, your lifestyle and financial commitments will be based on that salary. Changing career to start from scratch is a big deal financially for those who have dependents and financial responsibilities like a mortgage because it is likely to involve a drop in salary.
So, even if someone would jump at the chance of becoming an adviser mid-career, the timing may not be great financially.
“Some people making the change will have to accept there will be a drop in salary,” says Houlihan. “If you’re learning, you’re not going to be earning as much and sacrifices may have to be made. But generally financial advice is, on the whole, a well-paid career.”
Viability
Being viable from a financial viewpoint is also a consideration for employers taking on new entrants who are older. As Houlihan points out, taking on any new entrant is an investment. There will be a cost to the firm in training them until they are able to bring in some income.
But, as long as the adviser stays with the business long enough for the firm to recoup those costs, this would not be a problem. In fact, employing a new entrant at an older age could be advantageous if their families are grown up, as they can devote themselves completely to the role.
That said, given the role of an adviser is about building long-term relationships, some clients may prefer younger advisers who will be around to see their financial planning through to the end. Would a client bother trying to build a relationship with someone who might retire before or at the same time as them?
Younger advisers can see things from both sides.
“As long as an adviser is willing to learn and adapt to new concepts such as cryptocurrency, I don’t think it’s ever too late to start in the advice industry,” says Needingadvice.co.uk independent financial adviser Romany Youell.
“Similarly, there are older investment products you can no longer take out that it is necessary for young advisers to learn about. This industry is constantly developing/ adapting and we as advisers must develop with it or be left behind.”
As a young adviser herself, Youell sees being able to advise for the long term as a huge benefit.
“Aclient may have an issue if their adviser is going to retire soon or before them, especially if they are seeing the adviser for retirement planning,” she says. “Ultimately, if the client is paying for ongoing reviews, they may be expecting this to be a long-term arrangement.”
The feeling among the rest of the profession is that being closer to retirement than a client is not necessarily a problem, although it can be.
“I don’t think clients would take issue with an adviser retiring before them as long they’re not left orphaned as a result,” says Barrett. “For many clients, the prospect of starting all over again – sharing your financial goals and objectives – is far from ideal.”
For that reason, Houlihan sees age as less of an issue in firms which employ advisers to serve clients whose relationship is always with the firm rather than the individual. However, for other commentators, worrying about the age at which an older adviser is likely to retire is no different to wondering if a younger adviser will stay.
“We think clients would definitelyappreciateanadviser withabackground inanother professionand don’t believe theadviser retiring would beahuge concern when there’s no guaranteeayounger one would remain in the profession either,” says Kingswood wealth planner Alex Holloran.
Like other commentators, Holloran points out that knowledge of another profession could be used to build a niche client base.
“Perhaps it could even be a badge of independence for someone who hasn’t come through what seems to be the traditional route of a bank or insurance company,” he says.
