Financial services is a competitive, specialist sector and thus employers have strong incentives to hire the best staff and offer training. Its skills needs, therefore, focus on higher levels of skills, which are often proxied by higher levels of qualifications than those of other industries.
The sector has higher levels of attainment at levels 3 and above than the wider UK economy, and employs only a very small number of staff holding level 2 or lower qualifications. A small, but rising, proportion of the workforce has postgraduate qualifications.
Source: ONS Labour Force Survey 2001, 2006 and 2007
Entry with GCSEs, NVQ 2 or equivalent qualifications would tend to result in a starting post that would lead into roles that have administrative, sales or customer services focus. These roles could be within any of the financial services subsectors, but most likely to be found in retail banks or building societies, retail insurance, financial advice or credit leasing and finance.
Entry with A levels, NVQ3 or equivalent qualifications would enable entry to a career in administrative, sales, and customer services roles. It is likely that these roles will have integral training and an opportunity to then take professional qualifications. These roles could be within any of the financial services subsectors, but most likely to be found in retail banks or building societies, retail insurance, financial advice or credit leasing and finance. There are some opportunities to enter formal training schemes for people with Level 3 qualifications. These schemes often last two years and the candidate will experience a number of different departments within the company and will undertake professional qualifications as part of their training.
Apprenticeships and Advanced Apprenticeships are available for Providing Financial Services and Advising on Financial Products. Apprenticeships are available for people already in employment although some companies may also advertise for an ‘apprentice’.
Entry with a foundation degree, degree or equivalent qualification would lead to professional and technical roles. These roles will have formal training that will lead to professional qualifications. The companies that offer these schemes tend to be banks, investment firms, insurance companies and financial advice firms. Schemes can be competitive and often require good grades.
Graduate Training Schemes are available for people who have achieved a degree with a good classification – most employers will requires a 2.1, although some employers will accept a 2.2. These schemes often last two years and the candidate will experience a number of different departments within the company and will undertake professional qualifications as part of their training.
For more information on entry requirements and job opportunities go to the FSSC Directions website.
Source: FSSC LMI report 2009
The sector spends about 3.4% of its annual wage bill on employee training. Projected to current earnings in the sector, which is equivalent to about £1.6 billion. FSSC research suggests that, once the implied costs of in-house skills provision and management time are factored in, the true investment in skills rises to more than three times that total. This, however, is still short of skills spending in other related sectors, most notably accountancy.
Training is usually delivered ad-hoc, especially in smaller organisations, and a lack of time and resources can often restrict employers’ ability to deliver structured training. Employers generally prefer the flexibility of a dedicated in-house training provider, but they will turn to external specialists for training in areas, such as soft skills, in which it is not cost-effective for them to develop expertise.
Generally, employers are convinced that training contributes to personal performance and motivation, although, unlike other sectors, turnover is not substantially affected by the offering of learning opportunities. FSSC research suggests that management competence, especially the ability to manage people and relationships, is a strong catalyst for the effectiveness of training.
Source: FSSC The Skills Bill: Assessment of education and training provision in UK financial services 2007
Increasingly, a university degree is becoming the minimum requirement for entry-level roles in much of the sector. In wholesale banking, for instance, graduate recruitment is a highly structured and highly competitive process.
Employers tend to recruit from a small number of elite universities. Although no disciplines are considered irrelevant, firms tend to prefer applicants with proven quantitative skills. The emphasis on high-level numeracy and previous work experience, in particular, are driving increasing level of post-graduate recruitment.
Sources: Graduate skills and recruitment in the City 2006 and HESA Destination of Leavers from HE Survey 2005
Although in the past it was often possible for people to enter financial services with few formal qualifications, a university degree or professional qualification is now generally a prerequisite for entering most high-value added roles in the sector. This is in response to increased specialisation in the sector, the demand for postgraduate education is also growing very rapidly.
Staff are required to have adequate technical knowledge through Appropriate Examinations in order to perform a particular controlled function. Controlled functions are activities that, due to their potential impact on financial stability and consumer confidence, are required by the Financial Services Authority to be gained by individuals (known as approved individuals) who can demonstrate a high level of industry, product and regulatory knowledge. Most of the demand for Appropriate Examinations, however, is derived not from regulatory concerns, but from the industry's confidence in the exams.
Level 3 vocationally related qualifications (VRQs) and professional qualifications also have a great deal of currency with employers. Both employers and workers typically use these to aid career development.
Source: FSSC survey of awarding bodies 2008
FSSC has developed National Occupational Standards (NOS) which describe what an individual needs to do, know and understand in order to carry out a particular job role or function. Existing financial services NOS cover the following functions:
- Advised sales
- Anti-money Laundering
- Bank accounts
- Customer care and customer payments
- Financial services core competences
- Insurance claims, intermediation, underwriting and long term insurance
- Investment administration
- Leadership and management
- Lending and credit
- Pension scheme administration
- Providing advice for retirement
- Providing financial advice
- Generic financial advice
- Sales process
- Securities and Derivatives
Finding courses and qualifications - The FSSC maintains a wide range of resources on training, examinations and qualifications, as well as the lists of Appropriate and Approved Examinations, on its website.
Just as higher value-added sectors, such as wholesale banking and asset management, will shape the sector’s future, so will the need for higher-level qualifications shape demand for qualifications in financial services.
The sector derives little benefit from lower-level skills and will divest these to a great extent; demand will shift instead towards level 4 and 5 qualifications. This change will be fuelled by increased demand for higher qualifications among managerial, professional and technical roles, as well as by a massive upskilling of the sector’s administrative and customer service workforce.
The shift to activities and roles with high added value will be accompanied by a shift to higher levels of qualifications attainment. The focus of attainment will finally shift from NQF level 3 to levels 4–6 (SCQF 7–10), while the fastest growth in demand will be recorded for qualification offerings at levels 7 and above. In professional and vocational education, the most likely developments in the near future are:
- Strong demand for financial advice qualifications due to the FSA’s Retail Distribution Review and possibly due to the outcomes of the Thoresen Review.
- Slowing demand for qualifications in corporate finance and wholesale banking while market conditions remain difficult.
- Strong demand for qualifications and skills in pensions and investment, retirement planning and long-term care qualifications, in response to changing consumer demographics.
- Easing demand for mortgage advice qualifications due to a less buoyant property market.
- Rising demand for compliance qualifications, due to evolving principles-based regulation and employers’ efforts to upskill the middle and back office.
- Stronger demand for qualifications which have currency outside the UK due to globalisation of key sectors, especially asset management and its distribution channels.
Sources: FSSC survey of awarding bodies 2008 and Working Futures 2004-2014