A clear outline for career development in the short and medium term, along with a modest salary boost, have been cited as key methods to prevent talent from flying after completing their Professional Year, according to a recruiter.
Taking on PY advisers is a conundrum for advice practices. The profession needs quality new entrants and practices need talent, but the expense of taking on a non-revenue generating PY adviser creates a risk for a liability for practices that will lose talent they had to invest in.
According to Vivere Recruitment Group CEO Chris Gordon, PY advisers are typically earning $80,000 to $95,000 a year, plus super, but are being targeted with offers of $100,000 to $110,000 a year, plus super, after their PY is completed. The higher salary figures reflect the fact that the firms making the offer do not have to foot the bill for putting the individual through the PY.
While some firms will leverage their PY/younger adviser relationship for succession planning, giving a clear incentive for the younger adviser to stay and peace of mind about the future of the business for the older partners, Gordon says practices still need to be thinking about having a clearer plan in the shorter term, along with at least a salary bump upon completing PY.
“Obviously [PY is] a cost so in some cases [post-PY advisers are staying] on the same salary, but once you’re qualified then we are seeing people pay perhaps $100,000 to $110,000 plus super because they can start servicing clients at that stage, so that’s where the salary increase would come from,” Gordon tells Professional Planner.
He adds in the past few years that practices have been offering PY to current employees or using that as a tool to attract new people at the adviser/paraplanning level, but over the past six months a lot of those firms are retracting those type of deals and instead headhunting advisers.
“The reasoning behind that is they were spending a lot of time and money training these people or getting them through the PY and then having high turnover,” Gordon says.
“We’ve had a lot of [approaches from candidates] that are close to completing PY or recently completed say they’re looking for a new role.”
Gordon says it is a surprise those post-PY advisers are willing to leave, given the business had supported them for the past year, but people will always need to consider their next steps.
“The most common point [is] there is no opportunity to move into an adviser role,” Gordon says.
“Firms are offering that to try and retain staff but long term perhaps struggling move them into an adviser role quickly.”
Gordon also says moving beyond admin is “quite important” for post-PY advisers, and that might mean practices have to rely on outsourced administration and paraplanning resources to prevent PY advisers being anchored to those responsibilities.
For example, he says it’s not uncommon for associates to feel like they are still required to support lead advisers with ad-hoc duties.
“If someone has three to five years industry experience [and] they have just completed PY, they’re keen to move into that adviser role, but if they’re doing implementation still and they have to do that for another couple of years, some people are definitely struggling with that,” Gordon says.
Gordon recommends having defined career plan in place so there is a clear timeframe for career development, and to make sure all parties are on the same page before commencing the PY.
“If there’s a clear path, even if it is a couple of years further down the line but they’re being groomed into that adviser [role], then that’s fine, but if there’s no clarity around that, other firms will offer that for that level of candidate,” Gordon says.
“Don’t just put somebody through PY just to hold onto to them because at the end of that if there is no next step, they’ll likely lose them.”
