Will expat advisers be able to cure the industry shortage?

With financial advisers on the government’s skills shortage list this year, could an influx of advisers coming from overseas help to bolster these numbers and bring up the industry?

Earlier this month, Jobs and Skills Australia said financial advisers were among the 66 occupations that had entered the skills shortage this year as a result of the overall declining industry numbers, though it was absent from the list in 2022.

Anne Palmer, FAAA general manager for education and professionalism, said the organisation is working with the government on how the situation can be improved. 

“We do have a shortage so advisers from overseas are a possible solution, but they need to be qualified and understand the Australian taxes and laws. Unfortunately, we are not seeing the high numbers from overseas that we would like to see.”

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She said the ease of a foreign adviser coming to Australia depends on whether a person is classed as an existing adviser or a new entrant.

Treasury states a person may be an existing adviser if they:

• Have a qualification equivalent to an Australian bachelor’s or higher.
• Were authorised to provide advice between 1 January 2016 and 1 January 2019, either in Australia or overseas.
• Were not banned or disqualified in Australia on 1 January 2019. 

If this is the case for the applicant, they could proceed with a foreign qualification assessment.

If they did not provide advice between 1 January 2016 and 1 January 2019, then they are classed as a new entrant and must: 

• Complete an approved Australian degree.
• Undertake a Professional Year (PY)
• Pass the financial adviser exam.

New entrants with foreign qualification may apply for foreign qualification assessment, but this will not change their requirement to complete an approved Australian degree. Treasury suggests new entrants with foreign qualifications may enrol in a degree and have the provider assess them for recognition of prior learning (RPL).

However, Palmer said the organisation is working with the government to “bring the two paths into alignment” and there is also a provision for the minister to assess qualifications.
 

Case study 

Daniel Nel is a financial adviser at Tribeca Financial who moved to Australia in January 2023, initially completing a Graduate Diploma in Financial Planning remotely from South Africa. He flagged that he was already eligible for half of the eight modules via RPL which helped speed up the process.

He then applied to ASIC for an exemption on the PY by demonstrating his previous experience which was accepted, and he started working remotely for Lime Financial Planning (which was later acquired by Tribeca) in August 2021 as a contractor due to the COVID-19 pandemic. 

Although he qualified for an exemption, Nel said his work at the start mostly focused on support work and associate activities which was similar to the PY anyway.

Even though he is a certified financial planner (CFP) in South Africa and says the two countries have similar systems, he told Money Management it is “very difficult” to work in Australia, which is further complicated by ever-changing rules. 

“I would be the first to say, even if you have an exemption, you should still do a PY as the gap [between the different systems] is so large and the industry is so complex here. I was doing support work, customer experience, sitting in on meetings mostly for a year, and it gave me a lot of insight.”

Asked for his tips on making the move to the Australian industry, he said: “First, get the qualifications, which isn’t easy even if you are a CFP, and be prepared to start at the bottom.

“It’s unlikely you will be able to start as a senior financial planner even if that’s what you were doing before. You won’t just walk straight into a job; you have to lower your expectations.

“The complications are the first barrier, and then the second is finding an employer who will take a chance on people without Australian financial planning experience and spend two years of time and money training you and hope you will continue to stay on as an adviser.”

This is possibly the reason why a Treasury report into jobs and opportunities found expat financial investment advisers are among the least likely to be working in their nominated occupation. The job is one of 10 roles that have the lowest share of permanent migrants working in the nominated occupation or at a higher skill level nominated occupation, with just 37.7 per cent working in the nominated occupation.

If the government is serious about improving adviser numbers, incentives for employers would be a good start, Nel suggested.

“I don’t think we will see a huge influx of advisers from overseas as employers don’t have the confidence that you can do the job. 

“The government should have an incentive for employers to bring in skilled workers; someone is going to have to take a chance to get these people in. It’s a shrinking industry, so they need to do something.

“Australia is such a diverse country, and [expat advisers] can better understand the challenges faced by expats; you are better placed to help them.”

This was echoed by Ensombl’s chief executive Clayton Daniel on a recent podcast.

“We live in a world of cross-cultures, varying beliefs and global citizens – the successful financial planner of the future is someone who understands all these different cultures and beliefs, and it creates a great opportunity for planners to work in different countries,” said Daniel.