A PY adviser’s view on the industry’s future

Despite the overall positive adviser sentiment for the coming months, the absence of young people coming to the industry might be one of the biggest challenges, Mia Johnson, a Professional Year adviser at Keyman Financial Services, said.

Johnson, who said she was passionate about the profession and making it more attractive for young people, felt part of the problem was there were few positive stories to help young people understand what the industry was really about.

“Everybody is so worried about the cost of advice, and all the issues that we are facing but they forget that if we do not have more people coming into the industry, then we are not going to have an industry,” she said.

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“I think this is a huge problem that nobody is really focusing on addressing and I think if there is any way we can help with the professional year requirements and just make it more attractive to advisers to get younger people in, and make it less burdensome that could help.”

She also said that the message for young people about the state of the industry should be better emphasised as they did not currently view it as an attractive career choice.

“People who are in high schools and universities, they do not see it as an attractive profession and I don’t know why that is the case. I think maybe because there is not enough positive stories out there how we actually help people in their time of need and how we help people plan their future.”

When asked about what the licensees could do to help bring in younger advisers, she said that in the case of smaller practices, often with just one planner, it was extremely hard to take on a PY adviser

“I think if there is any way we can help with the professional year requirements and make it more attractive to advisers to get younger people in, and make it less burdensome that could help.

“There needs to be some type of balance between making it easier for practitioners to take somebody on but still teaching them everything they need to know to be good advisers,” she said.

At the same time, Johnson stressed there was even a larger part for industry bodies to play in making the financial advice industry more attractive for younger people.

“I think there is probably a room for licensees to help in that space but I think that industry bodies like AFA (the Association of Financial Advisers) or FPA (the Financial Planning Association) have such respected and trusted opinion on the industry and I do not know why they could not get out there and help promote the industry because maybe they are too concerned with other issues that we [advisers] are facing like the exam and the educational requirements.

“But I think that a lot of the responsibility could fall on their shoulders to get the word out there, I think that would be a big help.”

Previously, the FPA has stated it was working with universities and students but this had been more difficult during COVID-19.

Ben Marshan, head of policy, strategy and innovation at the Financial Planning Association of Australia (FPA), said: “The FPA is working with members to get to universities and to talk about how much opportunity there is in financial planning and how positive the future of financial planning is looking but COVID-19 has certainly been very challenging and it’s hard to get to universities at the moment and have those conversation with students.

“But as you start to see consumers trust in to financial planning, it’s easier to start having conversations with students in high schools and universities and how much how positive the future of financial planning is.”




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Any young person who speaks to a decent financial planner will be told the profession is in crisis. The pay isn't good for the level of education requured, the risks are enormous, and the work-life balance is non-existent. Add to that, most of our time is wasted on inane, red-tape and compliance tasks of little value to clients. Did I mention the risks are huge? We can lose our businesses and careers if we misinterpret complex, contradictory and confusing legislation and regulations. Yes we do an amazing job helping people, and it can be personally gratifying, but on balance it is not an attractive career choice. If we see significant legislative and regulatory change, then we will change our tune. We all want to see a flourishing profession, with young people entering. But in the meantime, I don't see the point of lying to young people or sticking your head in the sand like Marshan.

@ George Orwell,
You are on the money with your comments.
Neither the FPA nor the AFA had the backbone to look after their rank and file members and too easily acquiesced and capitulated to the government of the day.
This fight should have taken place by those representative organisations 5 years ago which is why more than 12,000 have already left and there will be a lot more.

So Miss Johnson, I wouldn't be counting on the FPA or the AFA to be doing any more than use rhetoric and pay lip service to fixing the problems that should have been tackled a long time ago and weren't.
Advisers with old tertiary qualifications including CFP designations were ignored by government and the regulators.
Most advisers are not capable of taking on a graduate and many don't want to take one on in their PY year , when they are expected to pay them $65,000 + super for 12 months , just to make coffees !

Despite what the current advisers think about this draconian legislation that has been imposed on the industry, the 'powers to be' haven't finished with you yet.
I'm not sure why politicians think that you can legislate against poor or bad behaviour.
It happens in every walk of like in every profession, because God hasn't been able to manufacture the perfect human being.
Yes, you can impose regulation upon regulation like there exists now, and be over-regulated with a myriad of risks associated that do not make this profession attractive to anyone wanting to enter it, with a modicum of common sense.

CFP designations were ignored because they weren't qualifications. When CFP was introduced it was given to "grandfathered" advisers with qualifications no higher than AQF 6 level. Many of these grandfathered CFPs remain highly influential in the FPA, which is one of the main reasons for its policy and credibility failures.

The CFP designation subsequently required completion of a very demanding 5 unit course at AQF 8 level, but advisers who completed this course were discriminated against by FASEA, due to the continued taint and influence of the grandfathered CFPs.

CFP's were discriminated by FASEA because the FPA recommended in their submission that it was worth 20 points out of 100. At the time Deakin Uni the course writer only gave one credit. You send a submission to FASEA recommending a Bachelor of Financial Planning is worth 100 points and a CFP course worth 20 points and see what happens.

The fact remains that CFP Course qualified FPA members were discriminated against by FASEA due to the actions of grandfathered CFP members who control the FPA.

The CFP Course qualifies for 4 RPL credits in most graduate level financial planning degrees. Just not with FASEA.

the CFP course (I completed the latest version), requires 5 units to be completed and requires a pass of 70% in CFP 1 -4 and a 75% mark in the CFP Certification Unit.

the CFP certification compares very well with the likes of say, the accounting certifications. for example, the CPA is a wholly multi-choice program (a designation only) with a pass mark of only 50%, and as is the CA program (5 unit grad dip, at AQF8) also only requires a pass mark of 50%.

so I am surprised that FASEA only gave me a 2 unit credit while the CPA's (wholly multi-choice program and pass mark of only 50%) and CA program (also only requires a pass mark of 50%) were given 1 credit by FASEA when the only relevant area over coverage to financial planning in those programs is probably the tax module.

Could it be that CFP is worthless because the FPA appeared at the Royal Commission and their members were disgraced...their members lied to ASIC 22 times, were charging dead people advice fees. It was called the Professional Partner Program and those "members" were found guilty. Further, FPA members were complicit by being silent?????? I would say given these relationships you're comparing apples with oranges.

The behaviour of a minority of FPA members may well be the reason for FASEA's bias. (And yours). However discrimination against all members of a group based on the behaviour of a minority is never a fair, honest, and professional way to behave. Not by FASEA (or you) in relation to FPA members, nor by ABC/Fairfax/ASIC in relation to financial advisers in general.

The Fact is the FPA put in a submission and FASEA adopted it. Remember they gloated that they "gifted" the meaning of a degree. The actions of grandfathered CFP's has nothing to do with it. FASEA followed the FPA submission, FASEA board even consisted of an ex FPA Director/board member at the time. So don't blame FASEA, don't blame grandfathered CFP's the fact is you should be asking questions of the FPA.

"Most advisers are not capable of taking on a graduate and many don't want to take one on in their PY year , when they are expected to pay them $65,000 + super for 12 months , just to make coffees !"

This statements shows an incredible level of ignorance for the value that an associate can actually bring to an adviser. They don't just need to sit there, they can be your paraplanner, administrator, compliance manager if you wish them to be.

There seems to be this expectation that PY candidates are an expensive paperweight. And sure, if you take one on right after graduation they will be. But the vast majority of PY advisers have worked in the industry for at least 3-5 years gaining enough if not more knowledge than the adviser expected to mentor them.

Exactly. Forget the state of the industry putting off new entrants, the attitude of the existing incumbents who are so openly hostile to graduates will kill intake. Why would anyone want to go into a profession with this level of contempt consistently directed at them?

Can we please abandon this myth that a lack of new entrants is a cause for concern. It's not.

Young people who are discouraged from a career in financial advice are being saved from a bad choice. They will be much happier, wealthier, and better regarded, in a different career.

And there is no shortage of licensed advisers. Even with a massive decline in adviser numbers in the future, there will still be more than enough advisers to service regulatory diminished demand. The regulators have decided most consumers should get their financial advice from real estate agents, super fund call centres, unlicensed accountants, and online advertising. That's why they turn a blind eye to these advice channels. They have decided that professional licensed advice should only be available to a wealthy minority. That's why they have made it so complex and expensive that only a minority of consumers can access it.

1. You can't fight the bureaucracy. The Liberal government, and the institutions they control, clearly do not want a financial advice industry to exist. The government are the ones closing down the industry; they are taxing and red-taping it so there is no commercial viability.
2. Read point one; you'd have rocks in your head to enter this industry. The kids are best to look elsewhere.

@Optimist,
These are not ignorant comments.
If these so called people you think have been in the profession as administrators /paraplanners / compliance manager for 3-5 years, where are they, and why aren't they lining up ?

What makes you think any of these people you so happily believe may qualify as an adviser and are either capable of actually able to fulfill that role and haven't so far ?
Is it a lack of ambition, a lack of ability to find a client or nurture a centre of influence,..... what is it that hasn't demonstrated any of those attributes .

The process of recruiting graduates straight out of university with suitable qualifications was always the road to redemption of the idea of finding those interested in becoming the financial planner of the future .

Why do you think the plethora of these people you talk about are not taking up the role
of doing the PY year as a novice financial planner ?
The answer is simple, those young people you talk about are either not there or are not interested.
The ignorance is not on my part, take a look at the statistics before you make erroneous statements

Why haven't they taken up the opportunity? Because quite frankly they haven't been given the chance. Either that, or they are still early 20's and have not been ready to step into an adviser role. We should not be pushing the idea that those who want to advise can expect to start PY directly after graduation - they simply are not ready.

The best way to do it is to nurture a graduation through the ancillary roles that are so crucial to FP. This develops a bond with the business which will only increase the ROI and reduce the risk of them leaving once the PY is finished.

Your statement that there aren't anyone out there wanting to do PY is factually untrue, the most popular job ads for associates are those that promise the PY. These people often come with good knowledge from previous jobs and high level degrees. Oh and shock horror, they think they deserve to be paid well for it - which they unequivocally should be.

Both former Labor and the current Liberal Coalition Governments are Industry Governance failures, one of which is ASIC's Industry Levy. We pay twice (1) professional indemnity insurance and again (2) the ASIC Industry Levy that recoups ASIC's litigation funding from advisers listed on ASIC Financial Adviser Register from enforcements against financial institutions. The Government wins twice (1) penalties received from financial institutions and (2) Industry Levy on financial advisory firms. Why is this so? The ASIC Industry Levy on financial advisers was designed by David Murray AO, former CEO of Commonwealth Bank who has a conflict of interest against independent financial advisers. The corporate ethic is "If you cannot control it, kill it" because independent financial advisers are competition to financial institutions and cause financial institutions to compete against each other that reduces product profits and benefits consumers. Therefore, the design of the Government's Industry Levy is to impose double cost on financial advisers and since 2018, this 'grim reaper' saw national registered advisers drop from over 24,000 to around 17,000. PI insurance premiums escalated because ASIC does not supervise, then when misconduct occurs, corporate lawyer culture is to ban financial advisers and avoids restorative justice and rehabilitation education in the same teaching room with CEOs and big bank Executives who authorised misconduct by their financial institution. The Joint Parliamentary Committee on Financial Services refuses to have financial advisers to sit beside ASIC on another table in Hansard hearings to tell the truth from industry experience, which indicates Governments do not want to allocate any economic coordination rights to financial advisers in order to avoid Antitrust responsibilities of financial institutions and successive Governments. The corporate lawyers conflict is to perpetuate industry problems that keeps them in a job. When are successive Governments going to stop treating financial advisers like sacrificial pawns and support them for better sound financial advice as highly effective social welfare programs because higher financial security of Australians reduces the drain on the Government purse? For example for immigrants coming into Australia, there is no policy coordination between taxing foreign superannuation transfers into Australia, superannuation funding above the CentreLink Assets Test threshold and income security in retirement ??? These policy failures do not make it right. Trying to give financial planning advice around Government's policy failures is stupefying by affecting financial advisers and their client relationship, as well as operate an ongoing viable small business that functions in the bests interests of its clients and increases competition between institutions.

First of all thanks to Mia Johnson for sharing her opinion and advocating for the industry.

Can we please stop telling advisers what to do constantly though? This is not directed at you Mia, just generally. Advisers neither created the current mess nor own it. That we survive it and advocate for change should be enough. We should celebrate how we continued to manage and support our clients through some of the most turbulent times - all while having this situation enforced from above to the detriment of all.

I think any reasonable person would agree that we are at a stage of over regulation with confusing and duplicated layers of it that doesn't achieve either a reasonable or sensible outcome. We do not have a system that benefits consumers, or even the intent of the underlying regulation. Its so bad that even a regulator (ASIC) has no idea how to provide compliant advice within the current framework.

Is it a surprise that an industry in contraction has few entrants? If young people look around to see what success is like in our industry what do they see?

Let's stop telling advisers about a problem they need to fix. We didn't create it, and we shouldn't stress about carrying more water for those who never listened and lead us to this point.

Good point Franz. Thanks to the licensing structure imposed on financial advice, individual advisers actually have very little control over the industry they work in. Advisers are controlled by licensees, which due to the flawed design of the licensing model tend to be product companies. (This includes the new type of product companies, licensees with inhouse SMAs).

Individual advisers have the ability to act in their clients best interests within the constraints of this system, which most do. But they have very little ability to improve the system as a whole. The real solution is to change the licensing model so that advisers can easily be licensed directly, rather than being under the control of product companies. Only then will advisers have sufficient control over their industry to drive the improvements most desire.

I have a one-time-only. never to be repeated, never again. once in a lifetime solution.

are you all ready?

here we go:

I sell my house (fully paid off) and then make myself, my wife, and my children homeless. then I take the proceeds from the sale of my home to give it to prospective PY "aspirant" financial planner(s).

then my wife, and I and two little children become homeless and camp out begging in front of martin place (there's good foot traffic there).

and I suggest the same for all financial planners who have a home to do this so we can fix the new entrant issue.

on an unrelated topic but one that comes up a lot "high cost of advice"

do any of you see barristers complaining about the high cost of their fees? or what a racket it is to "buy into chambers"

it's just how it is. financial planners charge high fees, people can't access professional advice (many also can't afford to have good teeth). the cost of financial advice is not the problem of the financial planner to fix.

there is a shortage in many professions. law, medicine, etc. again it's not the particular profession's issue to address. in fact the opposite is true the more difficult and more money you can make in a profession the more elite and exclusive it will appear to be, and the best and brightest get attracted to that.

just get on with the job. if there are only 5,000 financial planners left, which I think will be the case then that's all good.

if you are one of the last ones remaining you will be able to charge what you want and turn most away and only do the work you like to do with people with whom you like to do it.

as you will be charging a lot and your reported income goes up and up and up, more bright people will join the profession.

the rest of the people will have google so don't worry. a lot of people also google legal solutions and diagnose their medical condition, some even fix their own teeth. people are resourceful.

don't worry, it's not my problem. I have a long line of clients waiting to be served.

p.s. do you all remember the former federal attorney-general Christian porter? his defamation proceedings cost him $1m. was he complaining?

were his lawyers and barristers complaining that it cost their clients $1m in legal fees for his case? did the lawyer and barrister apologize for their high fees? did the government start an inquiry and waste more taxpayer money on a problem it cannot solve?

did Mr. porter pay his legal fees? yes (well technically someone else did but that's another point). did he complain about the high cost (no he wouldn't he was a barrister once too)?

if people want to get professional financial advice they either have to pay or get someone else to pay their fees for them.

but it cannot be made cheaper. it really is that complex.

Best post by far!!!

@ optimist,
If you think there are a cast of thousands out there available to do a PY year, where is your imaginary line of applicants standing, to replace those who have now left the profession ?
If my comments are not factually correct, then why don't you go to the FAR site at ASIC and count the numbers of new advisers doing the PY year.
It's an easy process .

"If my comments are not factually correct, then why don't you go to the FAR site at ASIC and count the numbers of new advisers doing the PY year."

I refer to my first point that there are a lot of people out there willing and wanting to start but they have not been given the opportunity. Please note that nowhere did I state that this cohort would be enough to stem the losses. Please also note that I did not say that there were enough entrants to the industry in general to stem such losses either.

I was simply refuting your idea that PY advisers are expensive paperweights and bring no value to their adviser mentor.

If you're going to argue with me, at least do so in good faith.

@ Optimist,
I note on Money Management today, there are 28 new entrants on the FAR register.
That will certainly offset the 603 that left in December/January or the 300 that left in January/February.

You're probably too young to know but in the mid 1980'a an agency war began between National Mutual (aka AXA) and the AMP.
If you were a new (green) adviser, those institutions would recruit someone from the outside, spend around $40,000 training them and if they were really lucky, 1 in 10 would succeed and provide a return on ROI.
National Mutual decided that it would be easier to recruit a successful adviser from AMP or elsewhere, offer them a large sum of money as an interest free loan over 5 and get an immediate return on their ROI.

The reason I'm telling you this is because I've been in the business 40 years. I've been in the senior management of life/Fund Manager companies, I've been a director of a very successful AFSL and I was tertiary educated.
Here's the the thing, whilst I've seen some exceptionally talented and successful advisers, they are few and far between and I've seen a plethora of other unsuccessful advisers, all very nice people but who did not have inherent client management and engagement skills.
Those soft skills are equally important in finding a client and building a client base.
A lot of those people you mentioned may well struggle to survive which is why many will not even consider taking on the role.
The commentary by the young adviser who started this thread is testimony to that fact..

Neither FPA nor APA have any influence with Government or ASIC to represent the best interests of financial advisers, who in industry logic are representing the best interests of their clients. The Government has avoided to apply a microprudential framework for the allocation of economic coordination rights horizontally from advisers to industry professional association to a dynamic functional microprudential regulatory framework, but instead from the Hayne Royal Commission to add another 3 layers of top down macroprudential compliance requirements in more paperwork that is non-productive industry burdens, the summation of which to quote 16th century Shakespeare "much ado about nothing".

You're arguing against an argument I never made. Please read my comments again.

Mia, honey, the only reason the profession is in crisis, is because successive governments and ASIC have let the larger financial institutions get away with forcing (brutally) experienced and qualified advisers into early retirement. Its a crime that one day will be picked up by ACCC. If that hadn't happened, those advisers would have had the time, patience and funds to train newcomers.

As it is, the rest of us who are still trying to make a living doing what we love, would struggle to take on any PY trainee that takes our attention away from revenue generating activities and meeting huge compliance burdens.

When the government wakes up to the fiasco they created, and forces ASIC to make reparation towards those forcefully exited planners, maybe there will be mentors aplenty to help the new grads. Perhaps you could start a call for ASIC to actually help those planners....?

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