New entrants face hurdles in securing professional year
When licensees have a clearer number of how many advisers are left in the market at the end of the year, this will likely prompt them to consider setting up a pathway for taking on new entrants.
Since January 2019, new entrants were required to complete a Professional Year (PY) which comprised of 1,600 hours of work, at least 100 of which was structured training, before they could work as a financial planner.
However, candidates had reported struggling to find a workplace willing to spend time and money on a new starter.
Marisa Broome, chair of the Financial Planning Association of Australia, said: “Young graduates and career changers aren’t daunted by exams, the cause [of fewer new entrants] is the professional year, that’s the hurdle for them.
“The rules are very prescriptive, firms don’t have time to take someone on who can’t give advice yet and there is not a lot of flexibility.”
Joel Ronchi, principal consultant at myIntegrity in Practice, said the problem lay not with the Financial Adviser Standards and Ethics Authority (FASEA) but rather that firms were already swamped with existing challenges.
“To be fair, FASEA has done a good job, it has FAQs, policy documents and templates on their website and they have built those resources up over time,” he said.
“But it is a struggle all round, licensees don’t have the time and resources and no one has done this before.
“It is hard for people to get a PY because firstly, firms are so heavily focused on their existing advisers passing the FASEA exam and secondly, it takes a fair bit of internal resources to put a structured pathway in place and can be onerous.”
Jodie Blackledge, chief executive of Fitzpatricks Group, said her firm had taken on a few candidates for the PY but that it was hard for the industry as a whole as it lacked large firms found in sectors such as accountancy or law that were able to take on multiple people on a regular basis.
However, both Broome and Ronchi said that the experience would gain awareness with licensees once the FASEA exam deadline had passed at the end of the year.
Ronchi said: “I wouldn’t say it needs to be improved but there needs to be greater awareness of it by licensees. Once they are rid of one variable in the FASEA exam, that allows them to focus on a different one which would be the PY.
“Once they have that clarity over how many advisers they will have left going into 2022, they will be able to plan and consider how many candidates they can bring on for a PY.”
He commented that once a firm had set the initial pathway up in the first place, that experience could then be replicated for subsequent candidates going forward.
“Now people are going through the process, the experience can be finetuned and I am hopeful of seeing changes. Already we are seeing changes which let people begin their PY while they are still at university rather than having to wait until they have graduated,” Broome added.