Does improving technology lead to a reduction in staff recruitment?
While advice firms remain healthy – with stable client numbers – growth plans are being curtailed. According to research from NextWealth, “only 40% of financial advice professionals have plans to hire staff compared with 59% the previous year”.
So, is this a sign that improvements in technology are leading to a reduction in recruitment? A closer look at the detail suggests not.
Firms are scaling back their ambitions, but more than 50% of the biggest firms are still looking to hire more staff
Following a series of dramatic adjustments in the first year of the Covid pandemic, 2021 saw everyone relax into the new “normal”. Then, in 2022, many advice firms started to become increasingly cautious.
The NextWealth report detailed that there was an initial post-Covid “bounce back” when advice firms reported a recovery in both recruitment and client numbers. Now, after more than a decade of optimism, advice firms are scaling back their ambitions in response to greater uncertainty.
That said, half of the largest firms surveyed are still looking to recruit. And more than half of all respondents are planning to grow by taking on new clients in 2023.
Here’s how the numbers break down:
- 40% of advice professionals are looking to take on new staff in the next 12 months
- 27% of those hiring – or planning to hire in the next 12 months – have vacancies for client facing financial advisers and paraplanners
- 53% of advisers say their firm will grow by taking on new clients next year
- 12% of financial advice firms are looking to sell or exit the market.
And, in this case, size really does matter…
How advice firms’ headcounts measure up
Little surprise that 45% of a firm’s total headcount in 2022 was made up of financial advisers and planners, but there was an increase in the proportion of staff in operations and support roles (21% compared to 19% in 2021).
Again, this strongly suggests that improving technology isn’t having a negative effect on recruitment decisions. Plus, when you factor in that paraplanners and research staff represent around 12% of advice firm staff, that becomes an even stronger no, as it is most likely these types of roles that may be usurped by technology in the financial advice space.
Of the roles now being recruited, the report showed that:
- 27% were client-facing financial professionals – advisers or planners
- 24% were paraplanners or researchers
- 24% were support and operations staff
- 17% were client services staff.
As shown in the chart below, the remaining roles were to cover compliance, I.T., and marketing, and together account for less than 10% of all expected hiring decisions in 2023.
The data suggests that robots are not taking over
Digital transformation affects jobs, skills, and company culture in numerous ways, but the fact is that technology tools primarily aim to help automate repetitive, manual, or mundane tasks.
By making the tedious stuff less time-consuming for humans, technology can free people up to focus on more enjoyable and, potentially, more profitable tasks. In the case of financial advice firms, technology can free advisers and planners up to spend more time with clients.
Use AdviceBridge to enhance, not replace
The AdviceBridge platform integrates seamlessly with existing software, significantly improving your business processes.
The intelligent software replaces the unengaging, complicated, and time-consuming tasks with engaging, insightful, and meaningful information and recommendations.
Whether you want to spend valuable time with your clients, make your business more cost-efficient, or automate your advice journey, the AdviceBridge platform can help maximise your time and profits.
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If you’d like to learn more about how AdviceBridge can help you to scale your business and enhance your service, please get in touch.