The bottom-line benefits of taking on a PY adviser

Many advice practices believe that taking on Professional Year advisers will drain resources. But forward-thinking firms are putting them at the heart of their strategy to drive productivity, grow new revenue streams and scale their business. 

Many won’t entertain the idea of a Professional Year adviser out of fear. Specifically, the fear that the adviser will leave the business once they’re qualified (and after many hours of training and mentorship).

It’s a legitimate fear for business owners and one that is not exclusive to our industry. 

But fears aren’t facts, and there are plenty of practices across Australia that are lifting productivity, increasing their profitability, and providing attractive career opportunities for the next generation of financial advisers. 

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In recent years we’ve seen a growing trend among advice businesses that require additional support around practice management. Practice principals and their teams are ambitious to grow but are hamstrung by time constraints, particularly as they take on more clients. 

The latest Adviser Technology Needs Report from Investment Trends found that the average number of active clients per adviser has risen to 120, up from 113 a year ago.

While some businesses may be deterred from taking on a Professional Year (PY) adviser due to a perceived additional workload, what we have found is quite the opposite. 

Building scale

Melbourne-based Link Wealth is the perfect example of a business that is using PY advisers to scale.

Stephen Sloane, Link’s founder and director, said the impact of the Hayne royal commission was a catalyst for him to turn his attention to recruitment. 

Stephen said PY advisers have been transformative for Link Wealth and have freed him up to spend more time on marketing and growing the business.

“Having five young associates doing their Professional Year has reshaped how we operate as an advice business,” he said. 

“We are now starting to see some of our recently qualified advisers mentor our PYers, so there is fresh momentum driving the business forward. It has been fantastic to see new ideas coming into the practice and it’s starting to really deliver that scale we were looking for.”

Likewise, for Gavin Lamb, practice principal of Navigate Advisors in regional New South Wales, taking on PY adviser Jessie O’Keeffe was an integral part of the firm’s growth plans. 

He explained why he took on Jessie and, critically, why he doesn’t worry about her upping sticks and moving to a competitor. 

Jessie has been employed by Navigate for over four years now and completed her PY with Gavin earlier this year. She was a hard worker and a team player at Navigate and had expressed a desire to develop her career. Gavin could see the makings of a sharp wealth professional.

So when Gavin was mapping out his organisational structure for the future and realised he needed more advisers, taking on Jessie as a PYer made perfect sense. 

“We have always had a pretty clear picture of where the business is going,” he said. “If you can see what the pathways are and where you can go, it makes it a lot more attractive to your people. Jess has had a great start from an administrative point of view and has been sitting in on meetings with us, doing research behind the scenes and understanding what the job of a planner entails. 

“I would never want to hold a team member back. If they have potential, it’s my role to find the right place for them.”

Strength in diversity 

For Navigate, the PY experience has been an empowering one, both for Jessie as a new adviser and Gavin as her mentor. But it has also delivered a broader uplift to the business and showed clients how the fees they pay are reinvested back into the business.  

“If you can’t nurture talent in your business then you’ve got a pricing problem,” Gavin said. “We really nurture homegrown talent and invest in our staff. Our clients respect that and they know their fees go towards that.”

Another misconception some practices have is that PY advisers won’t produce revenue for the business until they’re qualified. But for Gavin and Jessie, this just isn’t the case. He recognises that onboarding PYs like Jessie gives the business strength through diversity. 

“I don’t want the other planners in the business to be just like me,” he said. “I want them to have their own style and personality.”

A productivity powerhouse 

With half a dozen advisers-in-training, Link Wealth has seen firsthand how beneficial PYers can be to a practice, even before they begin attracting new clients as qualified financial planners. 

Link founder Stephen Sloane said PY advisers have been instrumental in boosting productivity across the firm.

“They are effectively allowing more clients to be serviced,” he said. “Because they've worked so closely with our advisers and clients over that journey, we literally just hand over the bulk of those clients to the associate once they’re qualified. 

He currently handles 110 clients and is looking to wind it down to 40 or 50 once more PYers are qualified. 

“This frees up our senior advisers to go out and find more clients, which drives the organic growth of the business.”

Stephen and the team at Link are a great example of a business that has turned a negative into a positive. While the Royal Commission caused significant upheaval for advisers and the broader industry, it was ultimately the spark that led to half a dozen advisers gaining hands-on experience as they enter our profession. 

CFS launched Professional Year by CFS to make it easier for financial advice firms like Link and Navigate to support new advisers to successfully complete their PY. 

Delivered in partnership with Ensombl, it offers education and a community where PY advisers and their supervisors can collaborate and support one another. 

Bryce Quirk is group executive – distribution at Colonial First State.