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The hunt is on: where will Lloyds find 700 wealth advisers?

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The hunt is on: where will Lloyds find 700 wealth advisers?

Lloyds’ ambitious target of recruiting over 700 advisers has raised more than a few eyebrows, increasing competition in an already challenging market.

Other wealth firms, such as Brewin Dolphin, Smith & Williamson and Tilney, have been ramping up their recruitment efforts across the country to increase their financial planning and advice coverage. With experienced talent already going to these established businesses, what chance does Lloyds have of finding the 700 advisers it wants?

‘For experienced hires, I would suggest that that’s an impossible target in a year,’ said Simon Charlton, director and co-founder of Roland Dowell Financial Services Recruitment.

‘We don’t have the timeframe, but if they’re looking at 700 people in seven years then that’s completely different to 700 people in the next 12 months.’

Charlton argued that, given enough time, Lloyds can leverage the extremely large pool of retail banking advisers at its and other UK banks’ branches.

‘If they are looking for a mixture of less experienced people who they are happy to take through from perhaps the retail banking side, people with customer service experience, then that is different.

‘If you put it all together and they’re saying 700 people over the next 24/36 months, then it is possible as opposed to probable. If you put it all together it could work.’

The bank is of course looking to build on its joint venture with Schroders, where the two businesses agreed to establish an independent wealth firm last year. Aside from the ambitious hiring plans, Lloyds is also looking to near-double its private client assets from £13 billion to £25 billion.

Lloyds’ plan to get back into wealth management has received much criticism since the announcement, raising questions over whether advice should be delivered through bank branches at all.


Too ambitious?


This concern is echoed by Mark McCue, previously a director at Barclays’ wealth arm, who said: ‘I respect their ambition, but can banks really deliver that level of service? Should they be delivering it? How are they going to deliver it? There are so many questions there I really don’t know the answers to them.’

He believes that the only real way Lloyds can achieve its ambitions is to train people in-house.

‘There aren’t 700 qualified people looking for jobs at the moment. They are going to have to train them in-house,’ said McCue, who now runs McCue Wealth Management, a partner practice of St. James’s Place.

He pointed to St James’s Place’s academy, where it trains young advisers, as an example that Lloyds can follow.

‘From start to finish at the St James’s Place Academy it takes 18 months to become qualified. I genuinely have no idea how Lloyds can find 700 people other than doing it that way,’ he said.

Charlton agreed: ‘St James’s Place has its own academy where they take people from a zero-base so it is certainly doable with retail bankers.’

However, Nick Shires, a director at recruitment firm Nelson Scott, believes this is a bit of ‘blue sky thinking’. He said retail bankers are too institutionalised and lack ‘outside the box’ thinking, which you need to be an effective adviser.

Other problems the bank faces, according to McCue, are shareholder accountability and cost. He added that if Lloyds has to poach 700 people, ‘it will be ruinously expensive and the business would not be profitable’ in the short term.

Having spent a number of years working in a bank, McCue said: ‘The problem with large institutions is that your management team signed up for that and two to four years down the line there is a change of management team and a change of focus. [The new management] asked why a part of the business is running at a loss and shuts it down.

‘This is what the banks have done for 20-odd years with financial services.’

Even if Lloyds somehow manages to find, train, or poach 700 wealth advisers it still may not be able to offer a functioning service.

‘It is not just the wealth advisers that they need to recruit,’ said Shires. ‘What they need to recruit is the infrastructure. A number of years ago they got rid of all the people who traditionally used to do financial advice.’

So in addition to the hundreds of advisers, it will require, Lloyds will also need to find around 300 paraplanners which may be an even greater challenge. Shires said if he has about 15 paraplanner positions open at any one time, he sees being able to fill three or four vacancies as a win.

‘If you look at the market now, there is a huge shortage of paraplanners. It’s supply and demand, its market forces, salaries are high because there is a shortage of them,’ he said.

Indeed, two years ago a qualified paraplanner in London would be earning £35,000 to £38,000 if they had two or three years’ post-qualification experience. Now the salary for that same position is up to around £45,000 to £50,000, Shires said.

There are plenty of challenges, but Lloyds looking to hire 700 people is a bold statement of intent. It remains to be seen if, in a crowded market with the cost of staff on the rise, the bank has the right strategy or even the will to see this project through.

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