The adviser exodus could have a significant impact on remuneration in 2021, with the lack of participants in the industry leading to an estimated 23 per cent average pay increase for financial planners.
According to an annual survey conducted by global recruitment firm Robert Walters, Australian advisers with between one and five years experience should go from expecting between $90,000 and $130,000 to between $120,000 and $150,000, while senior planners will have a marginal increase from between $140,000 and $170,000 to between $140,000 and $175,000.
Twenty-five per cent of wealth management businesses have indicated they will give pay rises this year, the survey states.
The good news also extends to paraplanners, insurance advisers and compliance specialists. Paraplanner salaries will purportedly increase from between $65,000 and $100,000 to between $85,000 and $110,000, while a spokesperson for Robert Walters named “risk and compliance professionals” as being among the most sought after individuals.
While adviser salaries are set to rise, employers in most other sectors remain wary of the pandemic’s continuing effect on the market according to Robert Walters’ managing director James Nicholson.
“We expect salaries will remain relatively flat in the year ahead – even in those industries experiencing the most demand – and a third of businesses have indicated they will be continuing with headcount freezes in the short-term,” Nicholson said.
The estimates confirm a likely silver lining for the advice industry after a harrowing few years that included a royal commission, strict new education standards, the loss of key revenue channels and an increase in regulatory restraints.
From a high of 30,000 advisers in 2019 there are now around 24,000 advisers in the industry, with further losses predicted leading into the adviser exam cut off date in January 2022 and the degree equivalency requirement at the beginning of 2026.
As the adviser ranks have thinned, financial instability and market volatility caused by the pandemic has reaffirmed the importance of financial planning in the eyes of the community. An appreciation for advice has also been signalled by policymakers, with the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, pledging to reduce red unnecessary tape.
There is hope that increased demand and streamlined regulation will help pull the industry back from its nadir, yet core questions remain around the affordability of advice; if adviser salaries are to increase, a corresponding increase in service charges could further alienate the advised cohort and push the industry into a high-net-worth niche. ASIC’s latest consultation on access to advice – which Hume has endorsed – will attempt to use adviser feedback to combat the issue.
Don’t show me the money
Despite the data pointing towards higher salaries for advisers, the survey also identifies a shift in priorities as professionals report other factors take precedence in their considerations.
Flexible working considerations will be a key driver for satisfaction for advisers in 2021, with 85 per cent of professionals surveyed saying they want to continue current flexible working arrangements and 43 per cent wanting to continue working remotely full-time.
The most important consideration for professionals, however, will be culture.
“Workplace culture, followed by job security and workplace flexibility have come in as the three most important things workers value for job satisfaction,” Robert Walters describes.
“Remuneration dropped to fourth place, with just 32 per cent of candidates saying that remuneration was most important for their job satisfaction – a significant decline from 92 per cent in 2020.”