In mid-May the an online portal called The Business of Advice went live, giving financial planning practices, licensees and associations access to leading-edge research conducted jointly by Zanetti Recruitment & Consulting and Griffith University.
Opening the portal to the advice community is designed to allow financial planners assess their own businesses and to understand how trends in recruitment will affect their ability to find, hire and retain good staff.
Among other things, the research has revealed that financial planning graduates will form a nucleus of an emerging financial planning profession, with almost two-thirds of small and medium-sized enterprise (SME) financial planning practices saying they will seek graduates to fill growth positions in the coming five years.
It has also revealed how forging closer links between the profession and academia will pay off in in the form of better-equipped new entrants, a body of independent and evidence-based research, and greater public trust and confidence in the profession and its practitioners.
And for the participants in the research, including firms like Chris Shiels’ Logiro, it provides an invaluable way to compare the firm’s structure, staffing resources, salary levels and the like with other small and medium-sized practices.
Unexpected results
Shiels, Logiro’s chief executive officer and principal adviser, says participating in the research produced some unexpected results.
“I’ve known [ZRC principal Ric Zanetti] for a long time and he sent [the survey] out to me and gave me an idea of what he was trying to achieve,” Shiels says.
“It sounded very much like just a survey of salaries. But then he sent me the draft figures and his initial publication of [the findings]. And I have spent a bit of time analysing what was in there.”
Shiels says one thing many small and medium-sized practices lack is “knowing what other people are doing”.
“We look at our business think we’re doing a pretty good job; but you look at the practice around the corner and they seem successful too, and you wonder what they are doing in their business.”
One of the metrics that caught Shiels’ attention was how many advisers are employed by other advice practices and how many clients they service. One business employs three advisers to service 300 staff; another has a single adviser servicing 900 clients.
“You go, OK, which one of those is ‘correct’?” Shiels says.
“And when you looked at Ric’s data, it showed you which was more normal.”
Sourcing financial planning graduates
Shiels says the sourcing of financial planning graduates as potential new advice staff is not something the industry as a whole has traditionally done well.
‘I do not think the promotion of that as a source of staff is done very well,” he says.
“We know it’s there, but we run a business, and we are very, very busy. You need to know how these processes work.”
One of the key questions addressed by the ZRC and Griffith research is where financial planning businesses can actually find graduates to employ. It’s a problem that Zanetti says is only going to become more pressing.
“If I look back over the last eight years, historically we have only recruited staff for our clients where the individual has existing industry experience,” Zanetti says.
“There was always a good number of motivated and skilled individuals. However more and more we are seeing challenges for business in a market where it’s difficult to attract and retain staff. In some job categories, especially financial planners and paraplanners, it is increasingly difficult without a focus on graduate recruitment.”
Recognise the value of graduates
Zanetti says a first step for many small and medium-sized financial planning businesses is to first recognise the value that graduate employees represent.
“Increasingly we are seeing that small business need to first see the value in graduate recruitment then form relationships with universities, and/or look for programs that exist in the marketplace to help them engage with potential future employees,” he says.
“Engaging early with students of financial planning masters programs can also identify career transition students with real world business experience, but not necessarily [with] financial planning experience.”
Zanetti says businesses such as Grad Mentor help to prepare students for entry into the financial planning marketplace, but the biggest challenge facing small business is finding the time to do it properly.
“That’s why I believe that collectively the industry – licensees, small business, educators and associations – have an opportunity to create a structured approach to preparing students for a future in financial planning,” Zanetti says.
“The PJC report outcomes will contribute to the right focus moving forward.”
