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.