As the banning of conflicted grandfathered remuneration draws near, many advisers will find they’re not able to replace lost revenue – for some this will lead to a significant impact on their businesses. How these advisers disperse is not yet clear, but the broader industry is now starting to recognise some of the new paths advisers are taking.

Continuing to work within a financial planning practice, albeit in an advisory or business operations role is a common piece of advice those considering their futures are offered. The experts suggest mentoring roles for those with strong client engagement skills and directorships or executive roles for those with good operational nouse.

This is the second article in our two-part series on the paths advisers are taking out of the financial planning industry in the wake of monumental change.

With regulators raising the guard rails around the rules associated with personalised advice, general advice has been suggested as an area where advisers adapt their skills and relationships to new or existing business concepts. Financial coaching and consumer education could lead to speaker engagements and publishing opportunities for those advisers willing to explore new areas.

Then there are industries linked to and commonly associated with financial advice, such as accounting and mortgage broking, where advice client bases and relationships will be highly valued.

Further afield, some experts have thrown out other career pathways including property development. Meanwhile, closer to home, investment firms often look to advisers to fill relationship manager roles given their knowledge of products, investment themes and their ability to speak the same language of their cohort.

This is the final piece in a two-part series in which Professional Planner asks six individuals in total (today’s three contributions are below) to open up about the numerous conversations they’ve had with financial advisers in recent months relating to their future options and pathways.

 

SKYE LONDON Y / Executive Coach and Lead Career Coach

It can be incredibly tough, but advisers should look at it as an opportunity to start fresh.

Advisers might naturally gravitate towards BDM roles within a fund, platform or insurance company. These can be difficult to crack, but not impossible with the right attitude and contacts. This could be challenge however as they’ll be up against people who are already working in similar roles.

Remediation gigs on a contract basis may be an option, but it depends on whether advisers can stomach the work. It may also be short term as the remediation projects are likely to dry up eventually.

Advisers from the large firms and banks might find a shift to advice roles in superannuation as an option, this is a trend I think we’ll see more of.

My advice to advisers thinking about moving out of the industry would be to focus on the value being added to the next employer. If an adviser came to me with some help figuring out what they should do the first thing I would ask them is what parts of the advice role do they enjoy and what parts are they really good at. I would even suggest they sit down with an excel sheet and rank all the parts of their advice role into areas they like and don’t like, which can help to get a good gauge on where the strengths are.

They should also look to leverage their network. The vast majority of vacant jobs go unadvertised so reaching out to connections could be fruitful. If advisers’ relationships are a bit stale they could even consider putting something out there on LinkedIn. It’s amazing how many people will be willing to help.

Finding a strong recruiter is an option. Sometimes just sitting down with someone who has a good view on recruitment and chatting about the options can be a real help.

 

STEVE PRENDEVILLE Forte Asset Solutions / Managing Director

When we first heard the FASEA guidelines one of the surveys said that up to 55 per cent would walk, and I think that was a knee-jerk reaction, I think it’s going to be substantially less than that, around 20 to 30 per cent.

Given that the average age in the industry when I last looked was 58, I think a number of people will just bring their retirement forward to January 2024. So the largest quantum of advisers leaving will go to full retirement.

Property development is probably the single most common career change that my clients have advocated. Many of them are already doing property development now; they’ve done a few successfully over the last five years ago and they’re looking to continue that at a greater level. They have that fiscal responsibility, they know how to research growth areas, they understand financing and have some marketing skills to leverage. A lot of it is logistical and process or project management driven, so a lot of the skills are transferable.

Some people in the larger businesses are looking at elevating themselves into a CEO or chair role, so while they aren’t an AR they’ll still have an interest and be able to contribute to the growth of the business. They’ll be progressively selling down their stake in the business but along the way they’re able to contribute. And if it works, they can also consider working as consultants to the industry, which helps avoid brain drain.

Others will semi-retire and start working for not-for-profit groups or seek professional board membership. One of my ex-clients has taken up a bank remediation role but he’s in the real minority, most that are looking to exit are trying to get away from the compliance regime, not contribute to it. There’s no appetite for BDM roles among the people I’m speaking to, that’s normally deemed to be a younger person’s game.

 

GRAHAME EVANS GPS Wealth / CEO

The average age of our group is 46 years old, so for many of our advisers it’s a big call to get out of the industry.

I’ve been in this industry 40-odd years myself and every time there’s been a significant change in standards or shape of the industry, we end up coming out the other side in better shape than when we came in, so I am telling our network to toughen up, to be resilient, because there’s a big prize at the other end where there will be a lot of demand for services and with higher education standards the industry will be more professional.

I find advisers generally fall into a couple of skill-set categories and those who might not want to go on and do the education are looking at how they can work with advice practices in different ways. Advisers tend to either be good at (1) client engagement, (2) running a business or (3) generating client leads. If they’re good at client engagement then they tend to be good at training and passing on those skills to other advisers. They may be very good at running a business, in which case they are looking at getting into some kind of operations role. Or they might be good at locating clients which tends to be a specialist skill – people who are good at finding clients will be valuable to advice practices in a client prospecting or lead generation role. This skill set I’d have to say is the exception rather than the rule.

Advisers who aren’t interested in doing the further education standards could find themselves exploring more of a general advice function which lands outside the FASEA guidelines, which could mean educating the public and conducting seminars.

From a skills perspective I’d say mortgage broking is probably the most similar to financial advice, but if advisers are going into mortgage broking to avoid continuing education, I’d say they’re probably just delaying the inevitable because that industry will probably move along that path at some point too.

 

Professional Planner is the leading source of news, information and analysis for Australia's professional financial planning community.
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