Attracting new talent, university obsession and a new alternative

Let me start by stating it is my belief that your own education is the greatest investment you could ever make. There is no other investment where such small sums of money can result in such lifelong returns.

This does not however, mean we should blindly pay any price for our education. Advances in technology, combined with people’s willingness to share ideas, have created an environment where you can become educated far cheaper than the universities and professional bodies presently charge.

Let’s take a look at our own profession and see where we may be able to obtain much needed new talent at an affordable price.

Many articles I have read over the years put emphasis on graduates to fulfill the needs of financial planning businesses, yet I believe this is simply wrong and that our unhealthy obsession with university education needs to stop.

If a college leaver wishes to get into financial services, they could attend Coventry University for 3 years and obtain a degree in financial services at a cost of £16,500, just for the tuition alone. When you factor in the costs of accommodation, it is likely to have a total cost of perhaps £25,000 plus.

However, they could go straight to the professional bodies, let’s say the CII for example, and study for 5 years to become Chartered at a total cost of approximately £2,696 (minimum, with no external study support or re-sits, all regulated diploma units plus 4 advanced). During this time they could obtain lower level employment, gaining much needed insight into a company, the profession as a whole, and the wider financial services sector.

In each example after 5 years, which individual would have a higher level of skill? My thoughts are that it would be the latter and far cheaper option.

In the field of financial services, we have a role to encourage and guide people into making sensible financial choices, yet if we cannot even do the math on obtaining suitable education to fulfill our role, then surely we are missing out on a valuable financial lesson would be financial advisers should perhaps learn as early as possible.

Just because something is widely known as a ‘good investment’, like education, it doesn’t translate into being a ‘good investment’ at any price.

It’s not only the universities who are guilty of widespread over charging, the professional bodies leave much to be desired.

As an example, over the years, I have purchased approximately 100 investment and finance related books, either second-hand from Amazon in physical form, or more recently, I have purchased cheap e-books and downloaded numerous entirely free research papers. The total cost of all of this material has been broadly equivalent to the fee I paid to obtain the CII J06 Investment book and examination.

Does this mean that the CII book was vastly superior in the knowledge it conveyed? Was it especially well written and engaging?

In my opinion, the answer is a resounding no. How many of us had to purchase additional material from Wizard Learning or Brand Financial Training, and make use of the free material and courses provided by the likes of Aviva, Old Mutual and JP Morgan, just to make sense of the text?

It’s not only the CII who are at fault, I obtained the Investment Management Certificate last year from CFAUK and as the official study manual was bizarrely laid out and poorly written, I purchased the unofficial BPP Learning study text and I am quite confident I wouldn’t have passed without this additional purchase.

Out of the numerous and considerably cheap books I have read, I would say even just a few of them have provided me with a far greater understanding of investments than the entire J06 study manual, yet many of these books can be delivered to your door for about £3 to £4.

Going beyond simple books, we can now educate ourselves further utilizing videos, podcasts and other entirely FREE web resources.

  1. Who needs a business degree when you can listen to Seth Godin’s start-up school podcast and then follow his blog?

  2. Who needs to attend university to study financial markets when you can follow the lectures offered by Yale professor Robert Shiller online?

  3. Why pay fortunes to learn the tools and techniques of financial mathematics, when tuning into Mithril Money on YouTube, or Khan Academy can teach you the math?

  4. Why study for investment examinations when you can read all of Berkshire Hathaway’s annual reports and obtain a huge treasure trove of wisdom from one of the world’s most successful investors, Warren Buffett?

All of these educational resources only cost your time and not a penny of your present or future income. Combining these types of resources with the broad range of cheap second-hand books available from Amazon will make you well educated, yet you won’t have any funny sounding titles or pieces of paper to show to the world. This matters in the world we live in at the moment, yet it really shouldn’t.

There are huge deflationary forces at work in the overinflated sector of education and we should embrace new opportunities to become educated, not restricting our mindset to the prevailing status quo of incredibly overpriced certificates.

It is our reliance on these certifications that are pushing the youth into debt through a desire to improve themselves, when so many cheap and free alternatives are available. How many of you wouldn’t even contemplate interviewing someone without a degree? I concede that we need a system of testing someone’s knowledge so that prospective employers can be assured of someone’s ability, yet surely in this digital age, it can be done far cheaper than our present system.

With respect to the professional bodies, I believe they are in a position where it is easy not to offer sufficient value to justify their fees, having an extremely captive audience (i.e. one where you need the qualifications and ongoing membership to even work as a financial adviser). This captivity has been attained through regulation, not through providing exceptional content that people would queue to purchase.

It is worth remembering that oligopolies that are protected by regulation tend to offer terrible long term value for its customers.

With a Diploma level CII membership costing £155 per annum, over a 40-year career, this will cost you £6,200 plus.

I would like to ask you, do you feel the professional bodies offer good value for money?

How many of you would freely choose to pay for membership and how many of you feel enforced into purchasing it?

As financial advisers have no choice but to play ball with professional bodies, I feel it is important to pressure them into providing better courses and study material at lower prices, otherwise I cannot personally see it improving. (Some however, may well like these barriers to entry, of course)

The solution to costly university tuition lies here – Financial Administrator and Paraplanner Trailblazer Apprenticeships.

Apprenticeships are an extremely positive development with a huge swathe of unemployed youth to choose from. Whilst many people will have their own opinions on what is the most important attributes to look for, mine would be find people who have two attributes, an inquisitive mind and integrity, everything else can be either taught by your guidance, or by my preferred method, self-learning.

It’s time to put aside snobbery and not push youth into overpriced education when far more varied, relevant and cheaper alternatives exist with just a few clicks.