Bridging the adviser shortage one entrant at a time
Two industry professionals have shared the vital role of graduate programs in attracting new entrants into the financial advice profession.
Preventing financial adviser losses post-royal commission and rebuilding the profession has remained a key focus for those in the industry.
This particularly came to light last month when Jobs and Skills Australia (JSA) added financial advisers to the list of 66 occupations being “in shortage” in 2023, when they had not been in 2022.
Speaking to Money Management, Anne Palmer, general manager for education and professionalism at the Financial Advice Association Australia (FAAA), identified two ways to bridge the adviser shortage.
“Number one is attracting people to study financial planning in the first place. The other one is keeping them interested and opening up opportunities for them to move in.”
In order to attract more tertiary students into the industry, Palmer recognised the need for greater awareness of the profession to begin with, starting at the high school level.
“Not many year 12 students think, ‘That’s what I want to do’. Awareness is low at that age group,” Palmer explained.
The FAAA recently appointed Louise Trevaskis to the newly created role of head of university and student programs to further promote the industry.
Her responsibilities include speaking with universities and high school career advisers to promote financial advice as a rewarding career option.
A dedicated career centre was also recently launched by the FAAA. The online portal provides specific job opportunities to new entrants as well as anyone in the profession seeking a new role.
Andrew Dunbar, director and senior financial planner at Apt Wealth, added that a significant number of Australians are unaware the advice profession even exists.
“Once they hear about it, they think ‘this is fantastic’, as opposed to some of the other white collar professions that we compete with,” he told Money Management.
“To be able to build such strong relationships with clients over a long period of time and get such satisfaction out of the work that you do, it really appeals to that next generation.”
Moreover, both Palmer and Dunbar emphasised the importance of hiring current financial planning students while they are still completing their degree.
“A lot of graduates who are qualified in financial planning don’t go into financial planning. They [often] go into accountancy, so we’re losing a lot of the people who are qualified,” Palmer explained.
Students who get a job in financial advice while they are still in university are more likely to stay and progress into their professional year (PY).
Apt Wealth heavily invests in the next generation of advisers through three key stages: completing an internship, progressing to a graduate program and then undergoing the PY.
“We’ve always felt that our competitive advantage in the market was going to be based on the strength of our people, by attracting and retaining the best people and developing them ourselves,” Dunbar continued.
Signs of recovery
Earlier this month, Adviser Ratings’ research revealed signs that the advice industry is stabilising.
The third quarter of 2023 demonstrated the second-lowest number of exits (251) and the highest number of new entrants (122) in five years.
“We’ve turned the corner and we are starting to see steady growth, but we still have a long way to go. I think we’re heading in the right direction now,” Palmer remarked.
Dunbar echoed her thoughts, with the volume of client demand still significantly surpassing the number of advisers.
“The intake rate at the moment is probably still not high enough to where it needs to be long-term to service the Australian community,” he said.
As more advice practices take on PY students, Dunbar hopes this will get adviser numbers back on track.
Palmer continued: “It’s a great time for new people to enter the profession. Existing advisers also have a role to play by talking to and encouraging new advisers and graduates into the profession. It’s a job not just for the association, but the whole profession.”