Adrian Batchelor, director of the St James’s Place Academy, explains how a “grow your own” approach to adding more partners to its roster is benefiting both the firm and its recruits.

Adrian Batchelor, director of the St James’s Place Academy, explains how a “grow your own” approach to adding more partners to its roster is benefiting both the firm and its recruits.

Wealth management is an industry notorious for “self-cannibalising” when it comes to recruitment. In many ways it struggles with a seemingly endless “merry-go-round” of staff chopping and changing employers, and there is a real lack of younger advisors coming through the ranks. One firm, at least, is tackling the problem using a “grow your own” approach to developing its advisor base.

After a successful pilot last year, UK-based advisory firm St James’s Place has hard-launched the SJP Academy – a scheme whereby professionals can retrain to work in the wealth management industry and eventually become a partner at the firm, running their own practice after two years.

The two-year training scheme is by no means an easy path to tread and it has also called for significant investment from SJP, but it is already yielding very positive results, explains Adrian Batchelor, director of the SJP Academy. He runs the Academy alongside Mike Wilson, the former chairman of St James’s Place, as principal advisor.

The SJP Academy came off the back of the firm looking “down the track to decide how it would expand”, said Batchelor. “We recognise that the self-cannibalisation seen within wealth management isn’t a sustainable strategy so we decided to perform a pilot exercise to see if we could grow our own.” After a year spent on research and carrying out a feasibility study, the firm starting doing just that.

Intensive training

Since graduates of the St James’s Place Academy enter the partnership and run their own practice, the firm is obviously committed to “covering all bases” when it comes to training its advisors of tomorrow. As such, for the first six months of their training students spend three days a week in the classroom, learning the nuts and bolts of wealth management and studying for the Chartered Insurance Institute Diploma in Regulated Financial Planning. The rest of the week is spent on practical training in the field with the firm’s current partners and its dedicated Academy management team. After six months training is “much more on the job, with students putting into practice what they have learnt”, explained Batchelor.

Demographics

The SJP Academy is attracting entrants from a wide range of fields, and while financial services professionals are in the majority there are students with very different backgrounds. “We have quite a few from the City – such as traders, investment bankers and people who used to work in corporate or retail banking – but also accountants and marketing specialists,” said Batchelor. The firm has also even taken on a few ex-sportspeople who are now building businesses leveraging their personal networks of sports professionals. Whatever their professional background, all the Academy’s students have already enjoyed considerable success financially: the average earnings of former students from the first - January - intake of this year were £77,000 ($121,000), while those of the second - May - intake were £107,000.

The Academy’s alumni are also diverse in age, with those in the first intake of the year ranging from being in their mid-twenties to early 50s (the average age being 38); those in the second intake are aged 39 on average. There is also diversity in terms of their education, the students largely being a mixture of graduates and post-graduates. “Most have a degree but not all…there are exceptional candidates who went a different route… we’re looking more for individuals with the right attributes,” said Batchelor.

Benefits for SJP

This brings conversation round to the advantages SJP sees in developing its own future partners. Basically, it boils down to “quality control” of advisors and inculcating in them the firm’s way of doing things and values, in Batchelor’s view. “We’re very proud of what we do and how we do it… this way we can train them to do things the right way from the start,” he said. A big part of this is “buddying” students with experienced partners for intensive one-to-one mentoring, he explained.

A further benefit to come out of the Academy is the fact that training advisors with such a diverse range of backgrounds is helping SJP to broaden its own client base, as in the case of the former sportspeople mentioned previously.

Of course, SJP is also hoping that the Academy will drive a significant proportion of its growth. The firm is targeting a net 5 per cent growth in its headcount annually and by 2014 it would like to see 25 per cent of this growth coming from the Academy, said Batchelor. That said, SJP - which currently has 1,702 partners – isn’t targeting a specific number of partners to have ultimately. “We’re more interested in quality of people,” Batchelor continued.

Benefits for alumni

The SJP Academy attracts individuals who are entrepreneurial and driven in character - entrepreneurial as they will eventually be completely in control of their own practice under the auspices of the SJP advisor network, driven because the training programme is undeniably quite tough, covering as it does such a range of knowledge and skills. It focuses on four key areas: attaining the required professional qualifications; training on every aspect of the SJP proposition; the acquisition of a broad range of advisory skills, and business management. The breadth and depth of knowledge candidates have to acquire does mean that the course isn’t for everyone, concedes Batchelor, who says that inevitably some don’t complete the course because “they find it too tough or realise it’s not right for them”.  That said, the Academy does boast a 60 per cent retention rate.

Those that do manage to make it through the full years two years of training end up running their own business on their own terms – and this is what Batchelor sees as the initiative’s real selling point to recruits. “It’s a chance to be in control of their own destiny,” he said, adding that this model allows SJP’s new partners to “flex” their working day in a way that people simply can’t if they are locked in to the City treadmill of long hours and rigid schedules. This flexibility is something people are increasingly looking for nowadays, said Batchelor, particularly as the crisis caused so many financial services professionals to be made redundant from firms they had been working incredibly hard for. “People don’t want to be chained to their desks… they don’t want to feel that they never see their children,” he said.

As the Academy holds out the prospect for a more family-friendly working life it is naturally attracting women who are looking to combine a young family with their job and need the flexibility to work as and when they want to. In fact, SJP is seeing interest from women from both ends of the child-rearing age range – both those who have or want to have babies, and those whose children are now off to school and who want to return to work, but flexibly, explained Batchelor. Any initiative which makes it easier for women to work within wealth management is surely a good thing, he added, since the industry needs more women and the “softer skills” which they could be said to bring to the table.

One further big benefit that the SJP Academy route offers its graduates is the opportunity to operate the SJP model from their own area after completing their training from London, and there are alumni from as far afield as Cardiff, Cornwall and the Midlands, said Batchelor. As such, the Academy is shaping up to be a great way for SJP to grow its regional footprint.

But the firm isn’t alone in attempting to grow its staff roster from “grass roots” level: the wealth and investment management division of Barclays has initiatives to train both graduates and professionals from other industries, and UBS has a wealth management university in Singapore, for example.

It seems that the industry is rapidly waking up to the foolhardiness of relying on self-cannibalising a dwindling pool of talented wealth management professionals, and so we can probably expect other firms to follow in SJP’s footsteps in the coming years. This will up diversity in the wealth management workforce and can only be a good thing, Batchelor agrees.

Significant investment

Such an intensive level of training doesn’t come cheap – St James’s Place will spend around £2 million this year on three intakes of 20 students. But the firm is confident that its investment will pay off, particularly in light of the fact that it boasts what Batchelor calls “an incredibly high” advisor retention rate. “St James’s Place retains 90 per cent of its manpower year-on-year, even with deaths and retirements,” he said. Therefore, it seems unlikely that the firm will be training advisors for the benefit of its competitors, something which has to be front of mind considering such substantial investment and in a market environment where return on investment is a “prerequisite” to justify any additional spend, Batchelor agrees. “We’re fortunate because once people come to us they tend to stay,” he said. St James’s Place clearly sees itself as offering its advisors a “job for life”, and - moreover - a job which is easier to fit into the shape of people’s real lives than the cut and thrust of a City career.

While it is self-serving inasmuch that the Academy is foundational to St James’s Place’s growth strategy, the firm should also be lauded for proactively tackling the chronic lack of high-quality advisors which continues to dog the industry and helping to address what is undeniably an ageing and arguably male-dominated industry. As Batchelor sums up: “the industry as a whole is desperately in need of new blood.” Perhaps it is time for more of the firm’s peers to starting thinking about “growing their own” too.

A case study examining how the SJP Academy route played out for one female partner will follow shortly.