BWD salary census 2014
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The 2014-2015 BWD salary and benefits census provides an in-depth analysis of remuneration trends within the UK financial services sector. It highlights an upward trend in earnings for financial advisers, now the highest-earning category, partially due to changes from regulatory reforms and an increase in demand for advice. The report also examines the gender pay gap, identifies key recruitment challenges, and emphasizes the need for younger entrants in the profession.
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BWD salary census 2014
- 1. SALARY AND BENEFIT CENSUS 2 0 1 4 - 2 0 1 5 Financial Services Industry
- 2. Contents. 1. Introduction 2. Method & Sample 3. Executive Summary and Analysis 4. Census Results highlights 4.1 Financial Advisers 4.2 Paraplanners 4.3 Sales Support/Administration 4.4 Employee Benefit Consultants 4.5 Broker Consultants 4.6 Compliance 4.7 Employee Benefit Administration 5. Key Hiring Trends 6. Acknowledgments/Contact Us
- 3. This is the third annual Census from BWD. It is now established as a definitive reference source for salaries and benefits in UK financial services. The Census records cover the period from 2012, through 2013 and now, 2014. The three sample points span pre and post RDR and so act as a valuable analysis of the impact of this pivotal piece of regulation, whilst also showing how the sector is reshaping itself for the future. Whilst the Census is essentially designed to focus on its core subject – salaries and benefits - the report includes information and analysis on broader sector issues – emerging qualification benchmarks, the balance of independence versus restricted status and other matters of interest and concern to all industry participants and commentators. We also include BWD’s expert commentary on key recruitment trends for the various occupational groups covered in the Census. The definitive reference source for salaries and benefits in UK financial services. “ “1.Introduction
- 4. % The BWD Census will be of real value to you if you are a: • Financial Adviser/Planner • Paraplanner • Broker Consultant • Employee Benefit Consultant • Administrator • Compliance specialist For those with responsibility for the recruitment and retention of talent in these categories, the Census will help you understand how your current remuneration shapes and overall packages compare with the wider market. This salary census will also help you understand the likely requirements of potential recruits to your team as well as the levels required to retain talent. Individuals CoveredBusinesses This is a UK wide study of those involved in FS distribution or support. The Census covers Financial Advisers, Paraplanners, Broker Consultants, Employee Benefit Consultants, Sales Support/Administration, EB Administrators and Compliance professionals across the following regions :- Scope London 23.4% South East 20% South West 12.6% East Anglia 7.2% Midlands 16.3% Wales 4.3% North West 13.4% North East 7.1% Yorkshire 15% Scotland 10.2% Northern Island 3.7% BWD Search & Selection is solely concerned with ensuring that clients secure and retain the right talent to help their business succeed and that candidates find the best home for their talents and ambition. We hope that both client and candidate find the BWD 2014 Census a valuable resource.(Note: Some respondents operated in more than one region and the figures above reflect this.)
- 5. Respondents were asked to complete a confidential questionnaire, which was addressed personally and completed individually. In addition, we took practice level information from a number of firms who provided key salary, bonus and benefits data for their staff. This has helped to create a record depth of sample with data collected in respect of 760 individuals in total. Corporate and individual respondents were assured that the data would remain confidential and used only for analysis and aggregation purposes. 2. Method and Sample 760 Data Sample Size Individuals Financial Adviser Life Company Other Employee Benefits Independent Platform Consultancy Investment Provider Bank/ Building Society 59.9% 11.5% 11.5% 7.6% 3.7% 8.7% 5.2% Employment Category Respondents fell into the following categories of employer.
- 6. Roles The roles we have focused on and analysed separately are. The infographics below show the male percentage overall and by occupation. Financial Adviser /Planner 2014 2013 Broker Consultant 50.1% 10.3% 74.2%71.8% Paraplanner 14.2% Employee Benefits Sales Support/ Administration Employee Benefit Administration Compliance Consultant 9.3% 4.6% 3.4% 2.9% Gender Splits Financial Adviser 2014 2013 85.9% 89.7% Broker Consultant 2014 2013 84.6% 79.7% Compliance 2014 2013 63.6% 75.0% Employee Benefit Admin 2014 2013 50.0% N/A% Sales Support / Administration 2014 2013 51.4% 29.4% Paraplanner 2014 2013 47.4% 31.6% Employee Benefits Consultant 2014 2013 78.1% 82.4% Other 2014 2013 67.7% 70.5%
- 7. 3.Executive Summary and Analysis This third BWD Census gives us an important overviewofthefinancialservicessector,including pre-RDR benchmark data. It provides a detailed view of salaries, bonuses and benefits across the following occupational groups: – Financial Advisers, Broker Consultants, Employee Benefit Consultants, Paraplanners, Sales Support / Administration staff, Compliance and, for the first time, Employee Benefit Administrators. We look at the mean figures as well as the spread of earnings and we also show variations by region. The first Census covering 2012 showed earnings for Financial Advisers as materially lower than for either Broker Consultants or Employee Benefit Consultants; this relative positioning continued in 2013. However, in 2014, the situation changed and adviser remuneration – both for employed and self-employed – has increased markedly, so much so that financial advisers are now the highest earning category covered by this Census. This may be partly attributable to the apparent “advice gap” where a drop in numbers since the RDR has driven the price of advice upwards – reflected in higher earnings. However, adviser earnings have benefited from the business environment in 2014, which continued the good progress made in 2013, with the economy, stock market and housing markets being the main growth drivers. Naturally, financial adviser earnings will be more volatile year on year and more strongly linked to business volumes, particularly for self- employedadvisers-thehighestearningcategory of all - £84,521 for 2014. This is a reversal of the situation in 2013, where employed advisers did better, but as always we need to remember the value of the overall packages enjoyed by employed advisers. Within the adviser market the DFM sector has proven to be a major force in generating increased demand for talented individuals. Salaries and overall packages for advisers are moving upwards to reflect this demand and natural risk aversion means that advisers need to be offered reasonable incentives to move firm. It is important to note that the overall average salaries for all occupations shows good, steady progress over the years we now cover. For 2015, the overall average salary is £49,004 (7.18% higher than in 2014). Bonuses are in the vast majority of cases calculated either on a KPI/ Scorecard Basis or on a Discretionary Basis, partly to reflect regulatory standards and partly as good business practice. Within the KPI approach, two factors are given greater emphasis in 2014 – project performance and qualifications achieved. We note, however, that the Financial Adviser, Broker Consultant and EBC roles continue to be heavily male dominated. We also see that the number of males in both Paraplanner and Sales Support roles has increased. In some cases, the former reflects some advisers converting to Paraplanning. Changes in the wider work place and the demand amongst females for financial advice do not yet, it seems, work through to a growth in females in the FS sector. Moreover, earnings are strongly skewed in favour of males - a situation that we envisage must change over time. The average age of an adviser has risen again to 46 from 43 in 2013 and 42 in 2012. We remain concerned at the lack of younger advisers. The 2013 figures showed just 3% of advisers under 30 – this new Census recorded no advisers at all under 30. Even allowing for the time lag in new entrants to the sector qualifying as advisers, this is now a crisis in the making. It suggests to us that all adviser practices should look carefully at their recruitment and consider creating opportunities for new young entrants. The alternative is a concerning spiral where the price of advice rises further and we already see evidence of firms reluctant to increase packages for middle level planners, yet at the same time, unwilling to invest in new young recruits. There is strong evidence in the Census that Continued on next page...
- 8. Chartered status has effectively become the new standard for financial advisers. The vast majority of advisers in this Census are either Chartered or plan to become so this year. The Census looked at the earnings differentials and these clearly favour the Chartered advisers who on average earned 25% more than those advisers whose highest attained qualification was Level 4. This trend is also supported by the requirements of recruiting employers many of whom are now requiring chartered/CFP status for new entrants. Independent advisers earned slightly more than their ‘restricted’ counterparts, with single tie advisers some way behind. Directly authorised advisers earned 38% more than Network members. Financial advisers with the highest earnings are likely to be male, Chartered, directly authorised, independent and self-employed. Broker consultants in last year’s Census predicted a fall in their bonuses, this was proven to be a sound prediction as the move to a more KPI based bonus basis produced lower levels than previous new business based packages. There are several factors influencing their future packages, not all operating in the same direction. On the one hand, the Pensions Freedom changes will increase the need for close work with the adviser sector. On the other hand, several providers are focussing on their own D2C plans. The FCA Incentive Guidelines may have some effect on the ability of companies to provide support but the growth of BDC type roles in platforms and specialist retirement providers may have an upward impact on demand for BDCs. Overall, whilst pension contributions are holding up, we are seeing a continued drop in other forms of employee benefit provision as firms identify ways to trim the costs of their workforce. Nevertheless, within the EBC space, we see increased demand in the DC and Investment sub sectors, but flat growth in the risk and health care markets. The AE market continues to develop, though with some small and specialist operators gaining at the expense of the mid-size corporate advisers. The growth in influence of the big 4 has created some package pressure for actuaries though the EBCs tend to home grow where possible. Finally, we have seen some increases in paraplanner packages; something we have suggested was overdue in previous Census reports. This may be partly due to advisers switching to the Paraplanner role, and several firms recognising that increasing their resource in this area can free up their advisers to maximise face to face time with clients. 3.Executive Summary and Analysis
- 9. 4.Census Results Highlights Overall average 2014 Salary is Overall earnings expectations for 2015 Overall average 2014 earnings Salary + Bonus £45,720 55% 37% 7%£60,719 £44,895 £60,437 £41,644 £56,713 2013 2013 2012 Expecting Increased Earnings Expecting No Change Expecting A Fall 2012 1.8% 7.8% Occupation with highest total earnings for 2014 £80,774 Financial Advisers *Note that this figure is an un-weighted average of employed advisers’ total earnings and self-employed advisers’ earnings – in this Census, 81% of advisers were employed and 19% self-employed. In 2013 the highest earners were Broker Consultants and in 2012, Employee Benefit Consultants. Most contribution to pension: Employer and Employee Combined Financial Advisers 14.3% Most Optimistic Group For 2015 Employee Benefits Consultants 61.9%Expecting an increase in earnings Advisers who are directly authorised earned than those who are members of networks 25% More
- 10. Employed Adviser’s Total 2014 Earnings Average age of advisor in 2014 is of adviser respondents offer independent advice (In 2013 60.3% and 83% for 2012 pre-RDR) This appears to show a material shift back to independence. a small advantage over restricted advisers - £74,683. 2013 also showed a small advantage for independents. Self Employed Adviser’s Total 2014 Earnings £77,027 £84,521 £60,441 £56,327 £62,838 £60,533 2013 2013 2012 2012 27% 50% 3.8% 6.9% NB for package comparison purposes, employed advisers will also have benefits to add. Overall pension contribution for all categories of employment 12%13% 11% 2013 2012 43 42 2013 2012 46 Gender Pay Gap Financial Advisers are Earning Male BDCs and EBCs earn 44% more than their female counterparts - a pattern repeated in the 2013 and 2012 Census. Than 28% Male Females 77% £76,347 2014 Formula based on business income Multiple of salary earned A scorecard or KPI basis Discretionary 21.5% 7.7% 42% 46.4% 2013 25.1% 10.4% 51.6% 55.6% Independent Advisers Earned of Avg.
- 11. Levels of Earnings Optimism For 2015 2015 Expect a fall by up to 10% Fall by more than 10% Remain the same Increase by up to 10% Increase by more than 10% 3.9% 3.7% 36.9% 30.5% 25% 2014 4.3% 6.8% 38.9% 29.7% 20.3% The table below shows, for all respondents, their earnings expectations for 2015 compared to 2014: Most Optimistic Group For 2015 Employee Benefits Consultants 61.9%Expecting an increase in earnings
- 12. 2015 Salary 2014 Salary 2014 Bonus 2014 Total Earnings 2013 Total Earnings All Participants £49,004 £45,720 £14,999 £60,719 £60,437 Financial Advisers (employed) £63,752 £60,490 £16,537 £77,027 £60,441 Financial Advisers (self-employed) N/A N/A N/A £84,520 £56,327 Paraplanner £33,945 £29,904 £3,491 £33,395 £29,791 Employee Benefits Consultant £53,133 £52,219 £25,494 £77,713 £67,510 Broker Consultant £51,182 £47,657 £29,459 £77,116 £87,404 Compliance £48,763 £47,957 £5,314 £53,271 £43,122 Sales Support/ Admin £26,108 £24,853 £1,960 £26,813 £28,665 Employee Benefits Administration £25,917 £24,983 £636 £25,619 N/A Earnings by Occupation 2015- 2014 Comparison
- 13. 2014 2013 2012 2011 London £84,299 £68,067 £52,767 £52,110 South East £77,718 £68,284 £59,713 £54,966 South West £80,260 £65,808 £45,623 £39,906 East Anglia £71,725 £71,533 £33,328 £34,718 Midlands £78,955 £62,581 £47,081 £43,824 Wales £85,961 £83,761 £61,375 £67,750 North West £71,752 £53,827 £45,774 £47,777 North East £86,917 £75,670 £65,271 £57,667 Yorkshire £63,937 £56,854 £49,350 £52,992 Scotland £76,987 £53,288 £38,157 £40,359 N.Ireland £45,341 £71,635 N/A N/A Total Earnings by Region All Occupations
- 14. 4.1 Financial Advisers Census Highlights 86% 64% 46 81% 81% 77% 69% 14% 33% 3% 86% of Financial Advisers are Male (compared to 90% in 2013 and 88%; in 2012) - the low figure for female advisers is a continued concern. It appears that the sector is still not making itself attractive enough to the whole potential workforce. Nevertheless, some comfort can be taken from the move over the year from 10% female to 14%. 64% of advisers in the Census are independent (2013: 61%), 33% restricted (2013: 33%) and 3% are single tie (2013: 6%) 46 (2013: 43 and 2012: 42). This Census shows no advisers below the age of 30 (3% in 2013 were under 30). Even allowing for sampling errors, the minimal flow of new younger advisers must now be a real concern for the sector. 81% are Directly Authorised (2013: 87% ; 2012: 73%), suggesting the pro DA change post RDR has reversed a little 81% of Financial Advisers are employed (this shows a continued shift towards employment (2013: 77%; 2012: 69%) Average Age 2014 Independent Restricted Single Tie 2013 2012
- 15. 4.1 Financial Advisers Salary Benefits 60% 72% 53% Where earnings for self-employed respondents are a defined % of personal production Those using Balanced Scorecard / KPI have mentioned the following factors Bonuses for employed advisers are calculated by reference to financial measures Self-employed advisors typically gain Pension Scheme Membership is of the business value the produce 61% 7%31% 60% 70%67% 2015 2013 Expect No Change Expect A Fall 2014 2012 2014 Percentage of business income Multiple of salary earned A scorecard or KPI basis Discretionary 31% 8% 38% 47% 2013 33.3% 13.3% 58.3% 37.5% 2014 Business Produced Retention/Lapses Compliance Project Performance Qualifications Achieved Team Work Attitude Other 76% 44% 75% 17% 15% 41% 49% 19% 2013 87% 47% 87% 7% 9% 41% 44% 11% Of advisers expect their earnings to increase in 2015 (2014: 57% for 2014 ) Average days holiday for 2014 27.2
- 16. £0-20k £20-40k £40-60k £60-80k £80-100k £100-150k £150k+ 6.7% 4.1 Financial Advisers Employed 2014 2012 Salary Earned Bonus Total Earnings Car Allowance Avg. Employer Pension Cont. Employee Pension Cont. £60,490 £16,537 £77,027 £5,571 9.1% 5.1% £49,053 £11,388 £60,441 £4,696 7.3% 5.6% £46,337 £16,501 £62,838 £4,000 7.1% 4.5% £48,789 £17,492 £66,281 N/A N/A N/A 2013 2011 16%of advisers also received a car allowance 2014 2012 Self Employed Adviser Total Earnings £84,521 £56,327 £60,533 £52,550 2013 2011 6% 28% 21.3% 14.7% 12% 11.3%
- 17. 4.1 Financial Advisers Effects on Earnings ( Effect of status on earnings (1) Effects of Gender on Earnings Effects of Qualifications on Earnings Effect of status on earnings (2) 2014 Independent Restricted Single Tie £76,348 £74,683 £49,167 £59,488 £56,989 £45,706 2013 2014 Directly Authorised Network Member £84,042 £60,216 £61,243 £48,741 2013 The table below shows that in 2014 independent advisers earned 2.2% more than their restricted counterparts and 55.3% more than single tie advisers (in 2013 the gap was 4.4% and 30%) The table below shows the gender based differential with male advisers earning 28% more than females (the same differential as in 2013) The table below shows that Chartered advisers earn 25% more than those at Level 4. (2013: 23%) The table below shows that in 2014, directly authorised advisers earned 38% more than network members (25% more in 2013) 2014 2014 2013 2013 £82,918 £59,604 £64,669 £46,548 2014 Level 4 attained Chartered or Equiv. £70,351 £87,951 £53,206 £65,286 2013 25% Chartered Advisers on average earn than those qualified at Level 4
- 18. 4.1 Financial Advisers Other Employee Benefits 2014 2012 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 69% 40% 41% 9% 20% 2% 11% 49% 83% 47% 46% 10% 28% 4% 15% 48% 92% 56% 51% 16% 48% 10% 24% 78% 2013 Advisor Qualifications The table below shows that 100% of advisers have attained Level 4, as we would expect. It also shows that the majority of advisers (82.5%) have attained Chartered status or intend to do so this year or next. For the 2013 Census, we felt it was that it was perhaps too early to conclude that Chartered will be the new standard – we can now be more definitive – it is the new standard. QCF Level 4 (or equivalent) Expecting to attain chartered 2015 Chartered Status (or equivalent)* Expecting to attain chartered 2016 * (2013 29.5%; 2012:19%) 100% 49.1% 18.6% 14.8% Chartered DOWN Those Receiving Employee Benefits The new standard qualification Read table above for more
- 19. 4.2 Paraplanners Census Highlights 51% 37 59% 72% 49% 12.4%9% 15% Business Income 2013: 9% KPI 2013: 26% Discretionary 2013: 43% Average Age Business income KPI Discretionary Pension Scheme Membership is 37 32% 68%60% 40% 38 2013 2013 20132012 2012 2012 Bonuses are calculated by Expect income to rise in 2015 2013 Average days holiday for 2014 27.6 23.5 49% 37% 2013 2012
- 20. 4.2 Paraplanners Census Highlights 2014 2012 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 61% 35% 34% 6% 15% 2% 12% 47% 57% 25% 31% 2% 5% 0% 8% 42% 40% 19% 29% 7% 9% 3% 6% 4% 2013 Other Employer Benefits 2014 2012 Salary Earned Bonus Total Earnings Employer Pension Cont. Employee Pension Cont. £29,904 £3,491 £33,395 4.49% 2.82% £28,429 £1,362 £29,791 5.3% 4.7% £28,505 £1,968 £30,553 4.4% 3% £27,017 £2,178 £29,195 N/A N/A 2013 2011
- 21. 4.3 Sales Support/Administration Census Highlights 51% 34 53% 66% 49% 11% 6% 26% 43% Business Income 2013: 15% Multiple of Salary 2013: 9% KPI 2013: 21% Discretionary 2013: 38% Average Age Business income Multiple of Salary KPI Discretionary 38 29% 71%38% 62% 36 2013 2013 20132012 2012 2012 Bonuses are calculated by Pension Scheme Membership Expect income to rise in 2015 2013 Average days holiday for 2014 24.4 25 82% 68% 2013 2012
- 22. 4.3 Sales Support/Administration Census Highlights 2014 2012 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 63% 17% 34% 23% 23% 6% 17% 37% 57% 25% 31% 2% 5% 0% 8% 42% 40% 19% 29% 7% 9% 3% 6% 40% 2013 Other Employer Benefits 2014 2012 Salary Earned Bonus Total Earnings Employer Pension Cont. Employee Pension Cont. £24,853 £1,960 £26,813 5.14% 3.2% £25,661 £3,004 £28,665 4.3% 4% £27,456 £2,439 £29,895 6.4% 3.2% £25,384 £3,282 £28,666 N/A N/A 2013 2011
- 23. 4.4 Employee Benefit Consultants Census Highlights 76% 41 62% 90% 24% 79% 4% 83% 86% Business Income 2013: 15% Multiple of Salary 2013: 21% KPI 2013: 49% Discretionary 2013: 64% Average Age Business income Multiple of Salary KPI Discretionary 42 82% 18%70% 30% 41 2013 2013 20132012 2012 2012 Bonuses are calculated by Pension Scheme Membership Expect income to rise in 2015 94% 95% 2013 2012 2013 Average days holiday for 2014 25.6 26
- 24. 4.4 Employee Benefit Consultants Census Highlights 20%Recieved a car allowance £0-20k £20-40k £40-60k £60-80k £80-100k £100-150k 4.8% 28.6% 19% 23.8% 14.3% 9.5% 2014 2012 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 95% 50% 70% 15% 70% 15% 10% 55% 91% 73% 76% 30% 61% 15% 33% 55% 95% 66% 81% 39% 53% 30% 29% 70% 2013 Other Employer Benefits 2014 2012 Salary Earned Bonus Total Earnings Car Allowance Avg. Employer Pension Cont. Employee Pension Cont. £52,219 £25,494 £77,713 £5,525 6.8% 4.9% £50,018 £17,492 £67,510 £5,866 6.6% 5% £54,116 £32,979 £87,095 N/A 8% 5% £52,775 £26,635 £79,410 N/A N/A N/A 2013 2011
- 25. 4.5 Broker Consultants Census Highlights 85% 42 50% 93% 15% 41% 7% 78% 32% Business Income 2013: 40% Multiple of Salary 2013: 8% KPI 2013: 76% Discretionary 2013: 40% Average Age Business income Multiple of Salary KPI Discretionary 42 80% 20%81% 19% 42 2013 2013 20132012 2012 2012 Bonuses are calculated by Pension Scheme Membership Expect income to rise in 2015 2013 Average days holiday for 2014 27.8 28 92% 95% 2013 2012
- 26. 4.5 Broker Consultants Census Highlights 2014 2012 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 87% 41% 57% 16% 54% 7% 21% 50% 87% 40% 67% 16% 56% 8% 27% 54% 98% 60% 76% 33% 75% 10% 32% 78% 2013 Other Employer Benefits 2014 2012 Salary Earned Bonus Total Earnings Car Allowance Avg. Employer Pension Cont. Employee Pension Cont. £47,657 £29,459 £77,116 £5,293 10.13% 5.51% £51,740 £35,663 £87,403 £5,741 10.3% 7% £45,168 £24,191 £69,359 £5,400 10.4% 5.7% £44,127 £25,833 £69,960 N/A N/A N/A 2013 2011 53%also received a car allowance £0-20k £20-40k £40-60k £60-80k £80-100k £100-150k £150k+ 26% 28.6% 14.3% 16.9% 2.6% 10.4% 1.3%
- 27. 4.6 Compliance Census Highlights 64% 40 41% 71% 36% 7% 19% 48% Business Income 2013: 7% Multiple of Salary 2013: 7% KPI 2013: 27% Discretionary 2013: 53% Average Age Multiple of Salary KPI Discretionary 43 75% 25% 2013 2013 2013 Bonuses are calculated by Pension Scheme Membership Expect income to rise in 2015 2013 Average days holiday for 2014 26 26 87%2013
- 28. 4.6 Compliance Census Highlights 2014 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 62% 24% 29% 0% 29% 8% 5% 54% 80% 20% 47% 13% 27% 7% 7% 47% 2013 Other Employer Benefits 2014 Salary Earned Bonus Total Earnings Car Allowance Avg. Employer Pension Cont. Employee Pension Cont. £47,957 £5,314 £53,271 £7,500 4.57% 5.73% £40,767 £2,355 £43,122 £5,367 5.8% 4.9% 2013 5%receive car allowance
- 29. 4.7 Employee Benefit Administration Census Highlights 50% 35 19% 89% 50% 15% 5% 35% 46% Average Age Business income Multiple of Salary KPI Discretionary Bonuses are calculated by In Company Pension Scheme Membership Expect income to rise in 2015 Average days holiday for 2014 24.9
- 30. 4.7 Employee Benefit Administration Census Highlights 2014 Salary Earned Bonus Total Earnings Car Allowance Avg. Employer Pension Cont. Employee Pension Cont. £24,983 £636 £25,619 £5,300 4.39% 2.89% 4%also received a car allowance 2014 Life Cover PHI Private Medical Private Dental Flexible Benefits Subsidised meals Critical Illness Subsidised training 89% 31% 54% 19% 50% 8% 23 % 54% Other Employer Benefits
- 31. 5.Key Hiring Trends: Financial Advisers As predicted, 2014 proved to be a strong and robust year for advisory firms as the mood of confidence continued, buoyed by a strengthening economy and pensions reforms. The financial planning divisions of discretionary investment management firms are leading the way in terms of activity with many seeking advisers of all levels. The integrated model between investment management and financial planning firms is seen to strengthen the client service proposition and we have seen recruitment hires increase due to business growth. As our census shows, most employers are accepting the need to‘uptheirgame’byincreasingbasic salaries to attract the real talent. This is in light of a lack of availability of good people in the market and a reticence of planners to move unless forced through redundancy, takeover or major changes at their current employers. Senior level planners on £75-80k basic salaries are looking for £100K+ to justify the risk of a move. Whilst some firms have now realised that they need to push their salary ranges and offer sizeable uplifts to extract the best people, employers still looking for solid, experienced planners at £50-60K struggle as these individuals are almost certainly already on that level and looking towards the £75K mark. Roles in this ‘middle ground’ seem difficult to fill with employers seemingly unwilling to consider young, up- and-comers, yet not paying enough to attract experienced planners. This prompts questions about progression for junior advisers, of which the industry is already suffering a lack. Chartered and/or CFP status remains high on the wish list of employers as they continue to recruit highly qualified individuals. Large parts of the industry have embraced the need for academic excellence and it continues to be a differentiator when promoting their proposition. The Retail divisions within banks and building societies did not see much in the way of growth in 2014.The majority of hires were due to attrition peppered with sporadic recruitment triggered by the end of recruitment embargos previously imposed through internal changes or restructures. However, 2014 did see the emergence of major changes within job roles and responsibilities as employers opted to combine relationship management with financial planning positions. This resulted in a number of relationship managers becoming qualified to offer regulated advice and financial advisers being asked to take on additional responsibilities of day to day servicing including a number of non-regulated sales activities. It remains to be seen if these changes will work and there are still questions as to whether these changes were driven by employers looking to cut costs or perhaps, offer clients a ‘one stop shop’ for all their needs. Banks & Building Societies Predictions for 2015 Summary It has been a busy start to the year and firms seemed to turn their attention to recruitment slightly earlier than the normal post-Christmas break. There are many good opportunities around for quality financial planners, particularly at a senior level. There is also an increased appetite for strong business developers – whilst these types of individuals have always been sort after, it seems this is even more so in the current market. We also expect to see further consolidation in the market and recent M&A activity is a clear sign of the land grab for assets. Whether this is for advisory firms to build scale, platforms looking to protect assets and grow distribution, 2015 will certainly be another eventful year.
- 32. 5.Compliance Like most other areas within Financial Services, the need for good quality compliance & T&C professionals continues to be high. The evolving regulatory landscape is inescapable with firms needing to adapt quickly to avoid the risk of FCA action. Demand has been particularly high of late with changes to pension transfer rules and the incoming pension freedom reforms beginning to take hold. Good, marketable candidates with an acute understanding of the advisory landscape remain scarce with most employers accepting the need to increase salaries above normal bandings. Mid- sized advisory firms now offer at least £75k to £100k to attract CF10 individuals and it is common for marketable candidates to have multiple offers if they do move. Outsourced compliance providers remain active with day rates continually improving as the battle for candidates continues. An alternative source of candidates is to attract compliance professionals from other disciplines such as law and accountancy. Whilst this can be a longer term process, the benefits cannot be ignored in such a competitive market. Summary
- 33. 5.Paraplanners The significant increase in basic salaries for Paraplanners is a clear sign that demand is not being matched by supply. There is a clear shortage of available Paraplanners which has led to employers stretching salary bandings and offering other financial incentives to attract them. It is also now common for paraplanners to be countered- offered by their existing employer, effectively using this to price them out of the market. To deal with this, we have seen more employers offer rapid career progression for administrators looking to up-skill and attain qualifications. We have also seen an increase in advisers wishing to step back from advice and provide technical support. A further increasing trend is the emergence of freelance paraplanners with attractive day and/or case completion rates prove very lucrative, albeit without the perceived safety of employment. In the short-term we see similar problems facing the paraplanning market for 2015 but encourage employers to be creative when considering hiring plans. Summary
- 34. 5. Administration/Sales Support As the market is beginning to react to the death of paraplanners, our experience from last year saw us receive a stable number of job opportunities. With administrators plugging the gap of available paraplanners, employers are under pressure to recruit – anecdotally, advisers consider improved back office support as one of the three key desirables when moving. Counter offers, where prospective candidates receive improved terms to stay with their current employer, reached unprecedented levels. It is now common for four out of five job offers to result in a counter offer and this may account for the increase in salaries for 2015. Withaconsistentpoolofgraduatesandgovernment backed apprentice schemes, employers can find willing and able candidates keen to enter the market at attractive remuneration levels Summary
- 35. 5. Employee Benefit Consultants Another census, another very eventful year for the world of employee benefits (EB). Once again we have seen further M & A activity in the market; organisations have finally made their conclusive decisions as to whether they wish to remain within the market, or pull out completely. This has condensed an already shrinking market and has created significant staff moves. Whereas the DC market and DC investment market are predicted to see further recruitment, the risk and healthcare market are anticipated to remain static. We also foresee that there will be an increase in the number of asset managers operating within the DC space, as this will continue to be the largest area of growth. A further area of key area of growth is Data Analytics. The large EBC/organisations that already have the technological capability are now also looking at how this can be integrated with the employee benefit and HR/Talent arena. This is another service which can add great value to clients; if the employee benefit organisation already has access to the client data in terms of their workforce then why not offer these services too? The actuarial market has also seen fairly significant movement over the past 12 months.Thishasbeendrivenbyanincreasein work won by the Big 4, with some sharpening their proposition more clearly than others. This in turn has resulted in a small amount of actuarial recruitment within the EBCs to ‘back fill’ individuals moving to the Big 4, though most requirements within this area are met through the EBCs taking on graduates and ‘growing their own’. The Big 4 also seem to be embracing a change Auto Enrolment and the resulting opportunities have naturally been very interesting to watch unfold; smaller EB firms have benefited most where mid-tier firms have not necessarily enjoyed the successes that many predicted. This has been further compounded by a lack of appetite from SMEs for premium AE solutions, leading to a sharp rise in smaller, less corporate outfits. The recent pensions reforms are also resulting in an increase in communications, engagement and financial education services for staff of organisations large and small. This has been reflected in an uptake in demand for these skill-sets, which in turn puts into sharp focus the critical importance in pensions in possessing strong technical knowledge with a communicative flair. What is equally clear is that it is paramount that employee benefit organisations define their market strategy and differentiate their service proposition clearly. Now, as much as ever, it is imperative that EBCs demonstrate how and where they can add value to the client. This has been evidenced by firms investing heavily in their proposition; tools and technology so that they may set up Master Trusts, sharpen their governance processes and develop new platforms. The seemingly eternal question – ‘does the future lie with the EBCs or the Providers?’ also continues to rumble on. The charge cap has certainly had an effect on Providers, no doubt a driving factor in their push to build teams dealing directly with clients but also to develop new introducer/intermediary relationships with solicitors and accountants. Since the EBCs require them to bespeak their propositions to client needs (as this is where the EBC adds value), the Providers need to Summary DC/ Healthcare & Risk Actuarial Auto Enrolment Communications EBC or Provider? find cost-cutting measures somewhere. The rumour mill is even suggesting some major Providers might pull out of EBC relationships altogether because of such factors, so this area is certainly one to watch!
- 36. 5. Employee Benefit Consultants in working culture, with this internal message now firmly percolating outward. Once bastions of long-hours and heavy workloads, they now encourage flexible working - fitted around individuals’ personal needs and ‘family friendly’. The Exec Comp market continues to grow in tandem with the green shoots seen in the wider economy, with the financial services sector growing particularly quickly. We anticipate this trend to continue, given the pace of regulatory change & novel reward structures coming to market. I am sure you will agree then, next year promises to be just as tumultuous, with very exciting times ahead! Executive Compensation
- 37. 5. Employee Benefit Administration 2014 saw numerous changes in the EBC market through mergers and acquisitions with opportunities for experienced and well qualified support staff remaining buoyant. Towards the latter half of 2014 and the beginning of 2015 we have seen EBCs seeking candidates for ‘Associate’ positions - a role between pure administrationandfullconsultancy.Thisisappealing to EBCs for a number of reasons: enhanced client service, internal career advancement and lower attrition rates. We expect to continue to see this trend develop throughout 2015 as EBCs continually seek differentiators in a competitive market. Pension administrators have continued to be in high demand across all levels. The ‘Big 4’ have been winning new clients especially in the DC market and recruitment activity has been consistently high. Summary
- 38. 5. Broker Consultants 2014 was another year of change within the broker consultancy market. It was surprising to see that basic salaries for Broker Consultants dipped 8% to £47,657 in 2014 from £51,740 in 2013. In the absence of any data suggesting that Broker Consultants had to take a pay cut to explain the change, we can only assume that those individuals who were made redundant in 2013 and 2014 accepted positions on a lower basic salary than they were once on. However, this salary dip has bounced straight back up by an increase of 7% in 2015, returning back to 2013 levels at £51,182. This increase in basic salary could be explained by, predominately, platform focused life offices increasing their employees’ basic salaries (by up to 20% in some instances) to reflect the changes made to the bonus scheme towards a more KPI measured system, as opposed to a pure new business sales. These bonus system changes are largely due to the FCA being more stringent on bonus levels, especially where large financial services organisations are concerned. 61% of respondents in the 2013 survey were proved correct in their assumption that overall bonus earnings would fall in 2014. Basic salary increases could also be explained by an increase in demand for Broker Consultants from tax mitigation solution businesses, platform distributers and specialist retirement solutions companies who typically pay higher than average basic salaries. 2015 and beyond should see a change within the financial services landscape following on from the pension freedom reforms and this will affect the IFA distribution / provider arena. There will be a considerable amount of new money released as pensioners will access their pension pots early. This will surely create demand for providers to service this new money through financial advisers. However, it remains to be seen whether we will see a significant change in broker consultant numbers. Many providers will be or are already instead looking to explore direct to consumer avenues to take full advantage of the reforms. Summary
- 39. We would like to say thank you to all the respondents that participated in this Census and our research partner Brendan Llewellyn of Marketing Edge. Brendan has over 30 years experience in FS corporate management and strategic consultancy and has worked intensively with over 40 providers on strategy,distribution, brand, marketing and research.
- 40. Contact Us www.bwd-search.co.uk Alistair Brownlee James Walker Gareth Davies Director Director Director 07971 262 782 07970 459 975 07811 110 844 [email protected] [email protected] [email protected]
- 41. Financial Services Industry SALARY AND BENEFIT CENSUS 2 0 1 4 - 2 0 1 5