The financial planning industry has fortified its future talent pool by introducing a qualifications pathway to the profession, but there is a consensus that it still hasn’t figured out how to win the hearts and minds of young adults.

With the current adviser exodus expected to bottom out at under 15,000 advisers in the next few years according to Adviser Ratings – down from 30,000 in late 2018 – marketing advice as a profession may prove to be just as big a challenge as rolling out FASEA’s education platform.

“I don’t think the industry has come round in aggregate to pitching itself properly yet, we’re still figuring out what that looks like,” says Advise Wise managing director Matthew Fenning.

The suite of changes brought about by the Financial Advice Standards and Ethics Authority have made the industry much more attractive in the long run, Fenning continues, and has “helped position us as a genuine profession in the eyes of the public”.

But the industry is still in the throes of “settling and getting comfortable” with the reforms, he says, and figuring out how to market the job to new entrants is a task we haven’t really embraced yet.

“I still don’t think most people have a clue what the advice industry looks like,” he says, adding that consumers vaguely perceive it as being “about rich people”.

Fenning doesn’t think any single cohort should be tasked with managing the entire process of marketing advice as a career, but believes the dealer groups should play a central role. “I know the FPA has done a lot there but I think it’s up to the licensee to design the program,” he says.

The industry is still licking its wounds after a brutal Hayne royal commission and adjusting to the subsequent rollout of reforms, yet at some point the funnel of talent coming through the ranks will need to be proactively nurtured. The good news here, Fenning reckons, is that the people who have financial advice on their radar – both at university and career changer level – seem to understand the fundamentals of the job.

“All the people that we interview… by and large they see this as a career that’s about finance and about helping people,” he says. “We’re pretty encouraged by that.”

‘There’s a big gap’

Many of the interviews Fenning speaks to are facilitated by Striver, a firm run by Alisdair Barr which seeks to connect university graduates with accounting and advice firms via online matching and ‘speed meeting’ events.

Barr says the supply and demand for advisers is “way out of wack”, and that the pipeline for talent is “not naturally great”.

He recalls FASEA CEO Stephen Glenfield saying recently there were 900 people in various stages of studying an undergraduate financial planning degree, which equates to roughly 300 graduates per year. Those numbers “pale in comparison”, he says, to the thousands that are leaving. “There’s a big gap,” he adds.

Like Fenning, Barr believes the biggest barrier to creating a talent funnel is a lack of awareness about financial planning as a career.

“Today I’m in front of 400 business degree students at Western Sydney University and there might be 20 that actually know financial planning is a career,” Barr told Professional Planner in September last year.

The issue still remains, he says, as “there’s not a whole lot of people at university and high school saying advice is a profession they want to pursue”.

When the industry takes care of its most pressing issues and finally turns its head to the incoming talent pool, Barr agrees that the education standards and professional year will make the idea of becoming an adviser a more attractive one for prospects.

“As a young person having structured program for development is a good thing,” he says. “Students want to be developed, they don’t want to be thrown in the deep end.”

*Barr will join Fenning and Conexus Financial’s Laurence Parker-Brown for a session called People in advice: Nurturing the next generation of advisers at the Professional Planner Best Practice Forum Digital on August 4.

Tahn Sharpe is a Sydney-based financial services journalist with a background in financial planning. He writes on advice, superannuation, investment, banking and insurance issues, is a certified SMSF Adviser and holds an Advanced Diploma of Financial Planning. Contact at [email protected]
5 comments on “Industry lags on pitching advice as a career”
  1. Avatar Jeremy Wright

    Winning the hearts and minds of potential new entrants, is putting the cart before the horse.
    You still need willing employers to take on the burden of employing these people and based on the numbers of advisers exiting and those entering the industry, it appears there is push back from everyone, except the theory based gurus who espouse a great profession, without having to get their own hands dirty.

    The suite of changes brought about by FASEA, has had many more negative than positive connotations.

    As to settling and getting comfortable, for one of the most important aspects of financial planning, which is a professional risk assessment and implementation of appropriate Life and Disability insurances to provide the proper foundation, there is only decline and decimation of the specialist risk writers, unless FASEA and the Life Insurance Framework is overhauled.

    A good starting point, would be to allow people to try before they buy, meaning that people can come in at an entry point, where they can start paid employment helping with insurance, without the ridiculous FASEA entry restrictions, then if they like Financial planning as a future career, they can then go on with their education requirements while still providing this important work for their employer and clients.

    There are estimated to be less than 3 thousand risk advisers remaining and yet, to look after a minimum 1.5 million Businesses and 12 million workers, Australia needs 30,000 risk advisers, a target that will never be achieved with the current unworkable regime.

  2. Avatar Paul Bursich

    Unfortunately for us and the wider public, these so called experts and the journalists who at best, have a theoretical view of what we do, have the ear of the politicians. Once again this is reflective of the failing of the FPA in their reactive advocacy, or lack of it on our behalf.

    What galls me the most is the constant lemming like praise that they heap on the achievements of the “reform” . If any other profession was halved in only a few years with the accompanying loss of tens of thousands of jobs there would be a government inquiry or dare I say it, perhaps even a Royal Commission

  3. Avatar Martin Le Tessier

    The suite of changes brought about by the Financial Advice Standards and Ethics Authority have made the industry much more attractive in the long run, Fenning continues, and has “helped position us as a genuine profession in the eyes of the public”.
    This is a joke right?
    How many existing advisers will have a positive view of the profession based on what has happend in the last 2 years?
    Financial planning has always been considered a genuine profession by my clients and people I know and FASEA has done nothing to add to that. It has however, made it incredibly hard to enter the industry with a good deal of new entrants who have sat teh exam failing.

  4. Avatar Daryl La' Brooy

    Couldn’t have put it any better Paul!

  5. Avatar Paul Bursich

    So let’s see if I understand the contention of his article:
    A 50% reduction in adviser numbers in just a few years;
    Virtually no new entrants to that same industry or “profession”
    A dubiously structured “professional year”
    and the problem is “pitching”? Really?
    I think the issue might be somewhat more serious. Also it was widely predicted by those of us that actually do the job but what would we know?

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