KDM Financial's Kris Martin

A couple of Queensland advisers have addressed the financial advice industry’s talent deficit directly by setting up a line of communication with schools and universities as part of a broader ‘adoption’ program to bring young prospects into the industry.

By visiting schools and universities and talking to students about advice, KDM Financial Planning’s Kris Martin and Luke Marshal have brought 15 graduates and interns through their North Brisbane firm, with over half of those being subsequently hired.

According to Martin, the connection with education centres is what keeps the firm’s talent adoption program humming. A graduate from the Queensland University of Technology (QUT), Martin says through talking to students they became aware that there was interest in financial planning, but not a lot of knowledge.

By the time students understand the profession, they’re often studying something else. “So we decided to get in front of the students a bit earlier,” Martin says.

The advisers now do “three or four” seminars a year each at the university, with a couple of ancillary  talks about various topics related to advice. “I’m also part of the QUT mentorship program so that keeps me front of mind with lecturers,” Martin says.

The students are keen to understand what the job involves, he explains, with a fair amount of emphasis on the client side of the equation.

“I don’t really go into the technical side at all,” Martin explains. “A lot of it is about what my typical week looks like, some of the interesting clients we deal with, the success stories and complications. I try to explain how crucial a good adviser’s role can be.

When the principal and vice principal of Brisbane State High School – both KDM clients – invited the adviser to come and speak at the school careers day, Martin says he leapt at the chance.

“I presented to a grade of year ten and 11 students, basically telling them how good it is to be an adviser,” he says. “It’s not typically what we’d do but it was great.”

The university visits undertaken by the advisers feeds into two streams of work placement negotiated between the KDM advice team and the university.

The first stream involves early-degree students who need placement within a business for two days a week over six weeks as part of their studies.

“The other one involves graduates at the end of their degree who are looking to move into paid roles in their firm,” he says. “We’ll hire them on a casual basis initially and within four to five weeks it becomes clear who is suitable for a role.”

The funnel of talent coming through to KDM is only half the equation; the second part is what Martin calls a “pod” style adoption program where grads are trained up by an experienced adviser.

If things go well, the recruit can begin FASEA’s professional year. Martin says it’s important to know just how committed they are to the course, however, given the amount of work involved.

“The training doesn’t so much cross over into the PY but lead into it,” he says. “It could take anything from one to two years to get to that point but we don’t want to push people into growing their career quicker than they want to.”

Finding solutions

While KDM’s connection with schools and universities is unique, its adoption program is one of many being employed by advice firms that are proactively looking to plug the talent gap.

Others, like Eureka Whittaker Macnaught, have been early adopters of the professional year program and seen young talent thrive under the mentorship of experienced advisers.

The need for advice firms to take it upon themselves to create paths for new advisers was predicated by the professional year provision since its inception in 2019, but the rapidly shrinking pool of listed advisers has increased the importance of talent programs.

According to Wealthdata there are 19,346 advisers on ASIC’s registry, down from a high of 30,000 in late 2019, with more expected to come off the list when the education mandate kicks in for most advisers at the end of the year.

While scores are going out, hardly any are coming in.

The number of provisional registered advisers is steady, but low. After less than 10 per quarter since January 2019, 25 came into the industry in the last quarter of 2020, then 39 in Q1 this year and another 39 in Q2, bringing the total number of provisional advisers in the industry to 123 as of July 1.

Experts predict the advice industry needs “500 to 600” grads coming through the ranks every year.

Martin says that while firms like his have just enough resources to implement adoption programs that facilitate new entrants, smaller advice firms should get more support.

“A few advisers I know don’t have the scale to do it like we do it,” he says. “It would be great if FASEA provided more of a structured plan where smaller firms can walk it through.”

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