How to… Tune up your finance team

In this article: Finance and insurance practices are changing fast. It’s time to invest in some fresh talent through specialist apprenticeships

The way finance and insurance products are sold has changed dramatically in recent years, and dealerships are finding themselves coming under more scrutiny all the time. In an effort to improve financial rigour and encourage ethical sales practice as regulators clamp down on rogue dealers, the sector is turning to what may seem a surprising solution: apprentices.

Over the next few months, the first graduates from the Finance & Leasing Association’s (FLA) Motor Finance Specialist apprenticeship will move into permanent jobs at the likes of Toyota Financial Services and Fiat Chrysler. The FLA apprenticeship is based on a professional standard – developed alongside the motor, retail and finance industries – that sets out the skills, knowledge and behaviours that trainees need to pick up. Crucially, that includes the relevant knowhow in regulation, taxation, compliance and integrity.

Young blood

It’s a pivotal time for dealerships. Nine out of ten new cars are now purchased on finance, making it a crucial revenue stream. However, following a review in 2017 that found customers were being overcharged interest to the tune of around £300m per year, the Financial Conduct Authority plans to ban dealers from making commission linked to the interest rates on car loans.

Practices clearly need to change, and apprenticeships could be part of the solution. The extra regulatory scrutiny was a factor in the creation of the new professional standard, but so was the expanding business opportunity to sell finance, says James Marquette, Senior Policy Advisor at the FLA. “Finance is an important revenue stream for dealerships, but the FCA’s review found serious shortcomings,” he explains. “Dealers need to make sure staff are selling motor finance effectively and appropriately.”

Secure Trust Bank (STB) is one company that recruited motor finance apprentices, fitting them into its V12 Vehicle Finance business. The apprentices rotated through underwriting, collections, recoveries and other teams, giving them a good range of experience in the business.

However, this sort of process requires careful planning. STB appointed a dedicated manager to oversee the apprentices and deliver weekly coaching sessions. “Be prepared to invest management time in the apprenticeship for it to be a success and provide value to the organisation,” says Richard Cox, STB’s Head of Motor Finance Operations.

Another employer investing in the future of its workforce is BMW. It runs a four-year finance degree programme at its MINI production site in Oxford. Apprentices split their time between study and work, either in accounts or financial control, and earn a degree in business management from Oxford Brookes University.

BMW has had no trouble attracting these apprentices thanks to the strength of its brand, says Simon Farrall, BMW’s General Manager of Apprentice and Adult Training in the UK. “The apprentices are extremely enthusiastic about cars,” he notes.

Making the most of an apprentice means giving them responsibility and a chance to deliver results, he adds. “The finance function is enabling the Oxford factory to become more efficient and productive. The apprentices support that through the insight they create in the spreadsheets.”

Lessons to learn

What attracted Bethany Neale, 22, to an accounting apprenticeship at Pendragon last year was the varied nature of the work, including researching how Brexit looks set to change UK tax law. “The second you feel comfortable, there’s something new to learn,” she says. She plans to progress to a higher apprenticeship at Pendragon, which she says will set her up “for life”. The firm has 51 apprentices in its fast growing finance team and is exploring running its own programme.

Finance and insurance are clearly incredibly important for the industry, even as vehicle ownership dips. Well-trained apprentices may be just what businesses need to get the take that to the next level.

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This is an edited extract from IMI's new MotorPro magazine, received free as part of IMI membership. Time to find out more about becoming a member of the most influential community in UK automotive…?