A range of industry challenges continue to plague the financial advice profession, according to BT, particularly as three-quarters of advisers struggle with staff recruitment.
The wealth management firm’s annual Adviser Sentiment Index 2024 surveyed 260 Australian advisers to unearth the key obstacles they currently grapple with.
When asked, “Which of the following do you see as being a challenge for you and your practice in the next two years?” BT identified legislative changes, cost increases and staff recruitment as the biggest problems advisers are facing this year.
The overwhelming majority (91 per cent) highlighted cost base increases and pressure on profitability as a prominent issue while 90 per cent nominated legislative, compliance, or regulatory changes as either a “challenge” or “major challenge”. Some 76 per cent identified finding and recruiting staff as being challenging for their firm.
The top 10 issues are as follows:
| Challenge | Percentage of respondents |
| Cost base increases and pressure on profitability | 91% |
| Legislative, compliance or regulatory changes | 90% |
| Finding and recruiting staff | 76% |
| Keeping up with technology | 74% |
| Ability to deliver above average returns for clients | 72% |
| Changes to super legislation | 62% |
| Client attraction | 58% |
| Staff retention | 56% |
| Poor industry reputation | 56% |
| Succession planning | 50% |
Source: BT, April 2024
Finding and recruiting staff
Commenting on the third biggest challenge, Matthew Rady, BT chief executive, said: “One of the top concerns for advisers is finding and recruiting staff. We know we have a shortage of financial advisers in Australia. While we are seeing new entrants choosing careers in financial advice, they do not make up the number of experienced advisers who have left the industry.”
Support roles account for nearly half (45 per cent) of the recruitment demand in advice practices for the next 12 months. Some 30 per cent of businesses are looking to hire more advisers in the coming year, and 18 per cent are eyeing out paraplanners.
Alisdair Barr, founder and CEO of Striver, addressed the low number of students studying financial planning.
“Raising awareness of financial planning as a career path is important. I don’t think people aren’t choosing to study financial planning because they don’t like it, but rather that they don’t know about it,” he said.
His perspective aligns with Anne Palmer, general manager for education and professionalism at the Financial Advice Association Australia, who previously emphasised the need for greater awareness of the profession starting at the high school level.
To help solve recruitment issues, Barr encouraged advice practices to hire support staff who have advice-related skills with the potential to become an adviser later down the line.
“What we see works best is the firms that grow their adviser numbers out of their support staff. They put them through education, training, and development; by the time they have been in the firm for a few years, they grow into advisers. They are the firms that do best,” the Striver CEO remarked.
“The other common method is to poach someone from another advice practice. The problem with that method is it doesn’t help with the overall solution to the problem of a lack of financial advisers.”
As well as problems with recruitment, over half of advisers surveyed also said they faced challenges around retaining existing staff.
Barr said it is important for firms to have good career plans for their employees to deter them from leaving, especially when recruitment has been flagged as being a difficult task. Research by recruitment firm Robert Half found pay is only one aspect of a employee’s desire to remain at a firm with staff also attracted by greater work/life balance and flexibility in their role.
“Understand where people want to go and remunerate them properly. While it isn’t always about money, it is important that you are having a conversation with them, working on their career plan, and providing them with the best opportunity to learn and grow in the business.”
