The Financial Advice Association Australia (FAAA) believes new entrants can no longer rely on large advice licensees for recruitment, leaving the obligation to smaller practices.
Attracting new entrants into the financial advice profession is continually cited as a key way to strengthen overall adviser numbers and the accessibility of advice.
This includes improving awareness of the industry at a high school and tertiary education level, as well as providing new entrants with a clear career progression.
Anne Palmer, general manager of education at the FAAA, previously spoke with Money Management about the vital role of graduate programs in addressing the adviser shortage.
“Existing advisers 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,” she described late last year.
However, the general manager recently acknowledged that the onus has been falling on smaller Australian financial services licensees (AFSLs) to recruit new advisers.
“That means that new entrants can no longer rely on big employers to run large graduate intake programs. That has left the obligation on smaller sized advisory businesses to train up new advisers,” she argued.
With just 317 new entrants joining the advice profession last year, Palmer added that not enough is being done to meet the ever-growing consumer demand for advice in Australia.
“At 15,600 registered financial advisers, we now have almost half the number of advisers than we had working in 2019, when there were 28,000 at the start of the year. Last year, just 317 new entrants joined the financial advice profession, so Australia now has just one authorised adviser for every 1,695 Australians.
“That is not nearly enough to meet the rising demand for financial advice from an ageing population.”
With 750,000 Australians expected to hit retirement over the next five years and 3 million to become eligible to start drawing upon their superannuation in the next decade, the number of consumers seeking advice is only set to climb higher.
Palmer continued: “So many more advisers will be needed to deliver retirement advice alone.
“While good retirement outcomes do not depend on financial advice alone, good advice has a very important role to play in maximising the retirement wealth of Australians. All of this reinforces the need for the industry to attract and train up more financial advisers.”
To further boost the number of new entrants, the FAAA remains focused on raising awareness among professional groups, high school students, and graduates to support entry routes into the industry.
Several of its initiatives, including financial literacy workshops and the advice careers centre, are experiencing “significant success”, she remarked.
The FAAA policy team has also worked closely with the Joint Associations Working Group (JAWG) to consider making tertiary education requirements more flexible while maintaining the same Australian Qualifications Framework (AQF) level requirements to ensure a minimum curriculum is covered.
The industry body has recommended to the Treasury that pre-existing education be included, assisting those seeking a career change to more easily enter the advice sector.
It is also establishing an “advice academy” to promote more professionals to work as advisers, which will support qualified graduates to find entry-level roles and complete professional year placements.
“The FAAA sees the need for a profession-wide academy to educate high school students about financial advice being a fulfilling and rewarding career and to encourage university students to complete financial planning qualifications.”
The industry is in a tail-spin. Who would want to bring on advisers when the ASIC and CSOLR taxes are so very high?