Adviser shortage set to continue in the medium-term

A qualitative study of the financial planning industry covering more than 20 leading dealer groups has pointed to the likelihood of strong employment demand in the financial planning industry for at least another five years.

The study, conducted by financial services training firm PS 146 Training Australia, points to financial advice being in the top 10 per cent of all employment categories in terms of future demand.

What the research also revealed is that being a financial adviser is a popular occupation if you are male, aged between 25 and 45, prepared to work long hours and live in NSW or Victoria. It found the typical adviser sampled in the survey was 40 years old and likely to work around 44 hours a week.

The research confirmed dealer groups are expecting to recruit up to 20 per cent more advisers in 2007, with a view to offsetting the retirement of up to 10 per cent of their advisers and meeting the growing demand created by compulsory superannuation and retiring baby boomers.

However, it noted that there is only a limited pool of experienced financial planners to recruit from, resulting in spiralling remuneration and hot competition.

Looking at how the adviser shortage can be addressed, the PS 146 Training research suggested dealer groups needed to adopt innovative acquisition and retention strategies, including recruiting from outside the industry and overseas.

Where graduates are concerned, the research suggested they represent a short-term employment option and that it is “better to poach them from the banks and be their second job”.

Where recruitment from overseas was concerned, the research suggested that qualified financial planners from South Africa, New Zealand, Canada and the United Kingdom represented an untapped source of experienced advisers.

Research suggested a range of options for retaining experienced advisers, including flexible working hours, job sharing, the creation of long-term financial incentives and the offer of equity.