Students of financial planning expect fully qualified financial planners to earn about $110,000 p/y, while existing advisers believe planners earn an average of $140,000 p/y according to a new study being conducted by Michelle Cull, a senior lecturer at Western Sydney University.
Across both existing and future planners, the average expected salary was $122,507.
The study – partly funded by the Financial Planning Association’s Financial Planning Education Council – is focused on understanding the motivational factors for people that choose financial planning as a career. While the research is still open – there are still “about 40″ interviews to conduct – Cull says the interim results should be fairly indicative of the final report’s findings.
Salary data aside, she says participants in the study made it clear that money was rarely a driving factor. Out of 12 response options to a question about the specific working conditions that motivated their career choice, salary was ranked number seven across both current and future planners.
“‘Working with others’ was the number one selection,” Cull says. “Followed by ‘work/life balance’.”
As to why future and existing planners initially chose their career, Cull reveals that the top response was ‘life experience’.
“They may have experienced hardship themselves growing up, for example, and that’s motivated them to want to help others,” Cull says. “They may have also had exposure to the benefits of financial planning through family or friends – some of the comments mentioned their parents having a financial planner and relying on them quite a lot.”
While some respondents said they were influenced in their career choice by “some other sort of engagement” with a financial planner, this rarely took place at high school, when university entrants are typically weighing up their primary study paths.
“I had nobody that is currently studying that found out anything about financial planning from high school,” she says.
The level of engagement students have with financial planning is of particular interest to Cull, who says that with up to a third of advisers leaving the market in the aftermath of the Hayne royal commission, the recruitment of new planners is a significant concern.
“We’re going to see a real shortfall of advisers in the future and I thought we could do some research on what we can do to narrow that gap,” she explains. “I want to find out how we can encourage more high school leavers to think about financial planning as a career.”
Cull says she is encouraged by the efforts of recruitment efforts of Alisdair Barr, whose financial services matching service, GradMentor, has been scaled up and was last week relaunched as Striver. The platform puts university graduates in contact with financial planning and accounting firms, but Barr revealed that the profession can often be a hard sell to a generation not familiar with the role.
“A lot of people in the financial industry think young people don’t want to be in this industry because of its bad reputation, but I interviewed 22 [students] last week and they didn’t even know there was a career path there,” Barr told Professional Planner.
Cull says the report backs the view that there is a lack of awareness around financial planning as a career option for young people. “We need to target the school leavers,” she says.
The study also looked at preferred employment destinations for current and future advisers, with independent financial planning firms and superannuation funds coming first and second respectively.
“Banks and insurance companies received the lowest scores,” Cull adds.