‘Falling into' financial advice seems to be a thing of the past with most young advisers these days making a conscious decision to be a financial adviser.
While the life stages of an adviser remain relatively unchanged, the pathway towards each stage has been chopped and changed thanks to regulation and legislation.
MAP Financial Strategies principal and senior financial adviser, Michelle Veitch, started her financial advice career by chance after spending 14 years in paraplanning and administration.
Veitch said an insurance and superannuation agent she worked for offered a 50 per cent stake in his business.
"I came into the business without any client experience but the decision was as much about owning my own business as being an adviser, and I was hopeful I'd be okay at it," Veitch said.
StatePlus general manager for financial planning, Sean Bradley, said people did not see financial advice as a career 20 to 30 years ago, but that had changed.
"They would have been in the industry and then transitioned into the advice sector. Now, people are making a conscious decision to be in the industry and to be an adviser," Bradley said.
However, Connect Financial Service Brokers chief executive, Paul Tynan, said this change in getting started had made it more difficult for advisers to set themselves up.
"To come into the industry today fresh out of school, the majority will go into a bank environment, a salary environment, or an industry fund. In the past you never came into a salary environment, in the past it was all self-employed," Tynan said.
The softer side of advice
Tynan said there was currently less of an emphasis on the basics of running a business, networking, and marketing.
The focus had turned to technical training.
"They [banks and industry funds] don't train anyone in the soft skills. Advisers don't know how to foster relationships or build relationships — the soft skills aren't taught," he said.
Veitch said she learnt soft skills on the job by seeing and advising clients with her partner.
"I still think soft skills are the missing link: we've got a number of young advisers and the soft skills are one of the hardest things to learn as it takes time," Veitch said.
"You can jump online and you can do your academic stuff yourself but you can't do this in isolation. You need someone to spend the time with you, and then its practice.
"Being a mentor is a huge time commitment so you have to have someone who is prepared to take a chance on you and give you that experience."
Veitch said at the end of the day, having those people skills was the differentiator between clients coming to her or to another adviser.
"Once the qualification base is set and once the products become relatively comparative, what's the differentiator. It has to be the people and the service and I think that is what clients are looking for," she said.
Will you be qualified?
With the Government's response to the Financial System Inquiry in October 2015 stirring debate around professional qualification standards, many advisers who entered the industry by chance may have to invest time meeting the new qualification level, or may have to leave the industry altogether.
Veitch said it would have a massive impact on her as she did not come into the profession with any sort of finance degree.
While she now has an Advanced Diploma in Financial Planning, if the Government decides all planners need tertiary qualifications, Veitch will have to take on more study.
"You can take the position of ‘will it make us better advisers?' Probably not, but I'm not sure that's the point. Will it help to improve the outlook on our profession? Probably," she said.
"With 27 years in this industry and 15 years advising — do I need the qualifications to do what I'm doing? No. Do I need this to move this profession forward? Yes."
McPhail HLG Financial Planning senior financial planner, Anne Graham, said she had a number of colleagues who were running their business full-time, and that it would be impossible for them to acquire a degree qualification within the proposed timeframe of 2019.
"I think a number of people are waiting to get clarification because there is still detail that needs to come through. Most of them are just getting on with business," she said.
"They're aware of changes and mentally have some contingency plans but there is no point worrying until they have all the detail."
StatePlus general manager for financial planning, Sean Bradley, also said clarity was needed on what other educational requirements could be included.
"The question becomes if there are people in the industry who don't have a degree but have a graduate diploma or a graduate certificate, how will we accommodate these people?" he asked.
"One of the things is that education is a hygiene factor every client expects from their adviser.
"The real skill of financial advice is the relationship with the client, knowing their needs and objectives, and for the client to act on the advice. Too often it is product selling, [but] it is that deeper understanding of the true needs and objectives and motivation to act on advice that is important."
Tynan suggested that those advisers who were too old to meet the education standards could become mentors.
"I ask the industry to bring out a new licensing regime called relationship managers to allow the transition into retirement," he said.
"We can't lose all that experience and knowledge. Let them transition and not run off, and it will help new advisers.
"It is a great opportunity for mentors… we should be using the skills of these people in a mentoring position. We should use those who run very successful businesses, who are under the radar, and haven't been in the press."