Private advice firms are becoming averse to hiring ex-bank advisers due to concerns about cultural fit, a recruiter specialising in financial advice says.
Fabian Ruggieri, senior consultant at Kaizen Recruitment, says many planning businesses don’t want to hire advisers who have a history of working only for AMP or the big banks.
“Quite a few boutique private firms aren’t willing to consider bank advisers,” Ruggieri says. “They just don’t want to look at them unless they’ve worked in a private firm or a non-bank aligned firm.”
Ruggieri says there is a perception in the non-aligned sector that advisers from the institutions are ingrained with a selling culture that wouldn’t align well with their client-based mentality. If advisers have a history of operating in a vertically integrated model, Ruggieri says, private firms tend to view them as less able to flourish in an environment where pushing product isn’t a primary motivation.
“The feeling out there is that the banks run more of a sales-based operation, whereas private firms tend to be more of a relationship-based and team-based business,” he says.
Ruggieri notes that this wasn’t always the case; however revelations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry have shown institutional conduct and culture in a negative light.
“I definitely think this is happening more so now because of the scrutiny the banks have come under from the royal commission,” he says.
Not without options
Advisers who come from AMP and the big banks aren’t without options, however, as they have a good chance of being picked up by industry superannuation funds.
“Industry super funds, especially, are growing out their advice divisions,” Ruggieri explains. “Traditionally, the funds have taken in-house advisers, who have gone from being a phone-based assistant to a generic advice provider and then a superannuation adviser, but we might see a few of these bank advisers move across into these roles.”
Ruggieri says industry superannuation funds are growing out their advice divisions to increase engagement with their members, in the hope that more members will retain their balance within the fund through retirement and into the pension drawdown phase.
“If industry funds don’t engage their members, they do one of two things once they reach retirement age; they take their savings out as a lump sum because they haven’t received any advice to do otherwise, or they seek a retail financial adviser who moves them into an annuity or an income pension fund.”