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.

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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.

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I have practices that would consider a PY student / adviser. Where do you find them?

As mentioned practices are struggling with many other issues at the moment so putting on additional advisers is not a priority. However that is only one of the problems.

The cost of a new adviser is enormous. It requires significant amounts of revenue generation to justify. So firms will maximise the output of existing advisers first by leveraging them through additional support staff which are much cheaper.

Secondly the risk of putting on an intern and spending the fund to develop them is high. If a new employee is a bad fit or gets offered more money elsewhere they can leave with no return to the firm that invests in them.

The best bet for a new graduate is to take a support role as a CSM and then as a Paraplanner at a growing firm and then they can earn the confidence of the firm to invest in them further. Young graduates are also not the advisers of choice for the sector of society that can afford to pay for advice. The old days of putting on young adviser to concentrate on Insurance while they learn the trade is no longer financially viable.

The final difficulty is that there are not many large firms to take big graduate intakes and have systems and roles in place to develop graduates. The few that exist have only about 300 financial planning graduates a year nationwide to choose coming out of the University system. Many of whom are choosing alternative career paths anyway. Quite simply the pipeline is too narrow and their are way too many choke points for there to be any turn around in adviser number in the foreseeable future.

Universities should take initiative and re-skill those who are enrolled into financial planning courses. This entire system is designed for exploitation of new joiners by dealers and government red tape costs (Exams, levies and what not).
The carrot is that 5-figure income which is published on seek. Fact is, unless you have a well-established business, there is no chance that a new adviser will earn a five-figure income in first 10 years. They are better off joining technical fields and earn a fair pay.
Would not recommend anyone's children to get into this red taped quicksand. Get trapped and there is no escape.

5 figure income? What, like $10k?

The best thing any financial planning undergrad could do is switch majors to accounting. You'll get a well paid job far more quickly. You'll still be able to give investment, super, and insurance advice just like a real financial adviser, but without all the regulatory overhead like licensing, disclosure, and Best Interest Duty.

The last poor bastard who contacted me for advice on joining the profession, in good conscience, i could not recommend that he continue. I told him he should become a plumber.

Well done Jane Hume, well done Josh, well done Kelly O'dwyre. Assorted fuckwits all, you have destroyed financial planning as a viable employer of young people or as a viable career path.

I opened and built a business from nothing with the express thought of my sons taking over from me in 5 years. Aftet the past few years ill just sell up in 10 years and ive told them do something else. We have no certainty for costs, no certianty on income, no certianty in legislation, the industry is under constant negative pressure from inside and outside, the stress is something ive never experienced before. Its really sad.

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