Aspirational but not particularly overpaid
Oksana Patron reports that Money Management’s 2017 Salary Survey has revealed an industry which is not unduly highly paid but within which a majority of people are more than ready to move employers to take the next step in their careers.
People working in the Australian financial services industry are not the salary high fliers that many people conventionally believe, with the 2017 Money Management Salary Survey painting a picture of an industry paying well above the Australian workplace average but not so much that they would be counted as needing to pay more tax on their superannuation.
The survey found that the highest number of respondents from across a variety of roles claimed that their annual income was between $130,000 to $149,000 (over 20 per cent of all respondents), followed by only 15 per cent that took home between $150,000 and $169,999 and 11 per cent who said they had made above $170,000.
Among financial planners and paraplanners, the data found that over 66 per cent of them claimed they worked for the aligned dealer groups, and 25 per cent reported their annual income to be between $130,000 and $149,000. At the same time, 40 per cent of those who worked for non-aligned dealer groups said their annual income was between $70,000 and $89,000.
According to the data, planners who worked for aligned dealer groups made up 75 per cent of those who ticked the box above $150,000 of annual income and, according to the survey, none of the planners who were hired by the non-aligned groups earned more than $170,000. In contrast, almost 12 per cent of all planners who were hired by aligned dealer groups claimed they took home an annual salary of higher than $170,000.
However, moving towards the bottom end of the income spectrum, the proportion of non-aligned planners and paraplanners seemed to increase, in particular in the $70,000-$89,000 brackets.
Across the industry, the respondents whose annual income tended to be in the highest brackets reported working mainly in the investment area (slightly over 40 per cent of all respondents) as their primary area, followed by retirement planning and self-managed super funds (SMSFs).
Age
When the data was broken down based on the respondents’ age, it revealed that for those who were in the 26 to 35 years age brackets, the majority said their pay was below $90,000 per annum. Not surprisingly, along with the increase of age, the survey showed a growth in a number of respondents who reported somewhat higher annual incomes, with 58 per cent of those aged between 36 and 45 years reporting earning more than $150,000 per annum. Also, according to the survey, the vast majority of the respondents (around 64 per cent) belonged to either of these two age groups.
As far as the experience was concerned, the highest proportion of the respondents participating in the survey reported working in the industry for between 10 and 14 years. In total, over 60 per cent of all respondents said they had at least 10 years’ experience across the industry. However, the majority of the respondents said they had been working for their current employer for less than five years, with only 16 per cent of all respondents stating they had been working for the same firm for over 10 years, with that number falling even further among those who had chosen to stay with their current employer for over 20 years.
When asked about how often they decided to change jobs, the majority admitted they would change jobs every five to 10 years, with only a quarter saying they would change jobs more often than two years. On the other hand, the survey also found that nearly 20 per cent of those hired in financial planning services tended to change their jobs no sooner than every 10 years.
Satisfaction
In terms of the overall satisfaction that was the direct result of their remuneration, only 30 per cent of all planners and paraplannners who participated in the salary survey believed they were being paid what they were worth, with an equal split between those who worked for aligned and non-aligned groups. What is more, the majority of those dissatisfied with their current pay admitted that moving up a notch on the pay scale would meet their expectations and help them increase their satisfaction level.
Almost 17 per cent believed their salary should be in excess of $150,000, with another seven per cent believing they should take home more than $250,000, the survey found. These numbers were followed by 10 per cent of those who would be satisfied with an income of between $220,000 and $249,000 and, according to another 10 per cent of the respondents, their annual pay should be at least $170,000 per annum.
Gender
As far as gender was concerned, the survey’s results proved that the majority of females tended to earn closer to the lower and mid-bracket on the scale, with only 29 per cent of female respondents taking home more than $110,000 per annum.
At the same time, 65 per cent of male respondents had admitted they were making above $110,000 and 35 per cent were earning in excess of $150,000.
On the other hand, the majority of all respondents participating in the survey said they felt valued by their employers, regardless of whether they worked for aligned or non-aligned dealer groups.
However, the biggest impediments to achieving the desired salary, according to many, were the overall lack of opportunities, followed by poor organisational management and gender.
Additionally, some respondents also stressed they felt like their employers had put higher demands on them in terms of revenue generation in order to qualify for a bonus. Similarly, there was a view that in some cases management acted as a hurdle for salary increases, with members of the financial planning community also pointing to the fact that organisations were not paying salaries commensurate with revenue generated.
Financial planners who were asked to determine some other stumbling blocks on their way to achieving a suitable salary said that institutions, such as investment banks, were viewed as those making huge profits on their back while it was the financial planners who took all the risk and actually “did the work”.
Job experience
As far as job changing patterns were concerned, of those who participated in the survey this year, the majority said they had been in the industry for over 10 years. Although only three per cent admitted they were currently actively looking for a new job, over 40 per cent said that even though they were not actively looking they were ‘available for offers’, followed by a further 15 per cent who said they had ‘put the word out’.
For half of the respondents the direct trigger to move jobs was the opportunity to take up a new challenge, while for more than 15 per cent it was poor relations with their previous employer that made them quit. Other reasons most often mentioned by the respondents were a change in their life circumstances, the opportunity to improve their salary and work conditions as well as the lack of training offered by their previous employer.
At the same time, over 30 per cent said they would not leave their jobs if they were offered promotion or training opportunities or employee share scheme.
Education
Over the last few months, the planning community also saw an ongoing push towards higher educational standards for both existing and prospective planners, with some dealer groups setting some extra educational requirements for advisers who were about to join their firms.
Following this, the 2017 salary survey found that almost 38 per cent of all the respondents said they held a Bachelor degree. Moreover, one fourth of them said they held a Bachelor degree in either finance or accounting while almost the same number of respondents reported holding a Masters qualification. At the same time, almost 30 per cent held at least a Diploma of Financial Planning (DFP) or an Advanced Diploma of Financial Planning, while only six per cent quoted high school as their highest level of education.
As far as professional qualifications were concerned, nearly 60 per cent of all the respondents claimed they had passed RG146 only, with a further 19 per cent saying they held the Financial Planning Association of Australia’s Certified Financial Planning (CFP) designation. Almost 13 per cent of the respondents said they were qualified as Certified Practicing Accountants (CPAs).
Additionally, almost 16 per cent of all respondents said that they were currently studying to obtain a professional qualification, with another 13 per cent saying they were planning to commence study soon.
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