Younger staff sets firms up with succession planning

SUCCESSION PLANNING KDM Financial Kris Martin Craig West Succession Plus

11 August 2021
| By Laura Dew |
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Firms seeking to put a succession plan in place would benefit from hiring younger advisers who will be at the firm for the long-term.

As many advisers left the industry, this was creating gaps that needed to be filled but there was a lack of suitable advisers available. This meant there were opportunities for younger advisers or graduates who were seeking their first role.

Kris Martin, managing director at KDM Financial, said his firm had worked with 15 students or graduates in the past three years through a partnership with Queensland University of Technology (QUT) and around half had gone onto permanent roles with the firm.

“They join in a mid-tier admin role with some client-facing and paraplanning work and three have moved up to a professional adviser role,” Martin said.

He said one benefit was that graduates were already used to ongoing education which meant they were unfazed by the educational requirements of the job. The advent of more technology in the job also suited younger staff as they required less training and could fit in quickly.

“So long as they can work in an office and understand the technology then we can train them up to be a financial adviser very quickly,” Martin said.

“In two to three years, they can be running an advice meeting on their own and in the meantime, they can do paraplanning or adviser support roles very easily.”

Martin said the addition of younger staff also benefited the business as it enabled the firm to put succession plans in place. Although Martin and his business partner were in their mid-30s, he was already aware of the need for the firm to have a solid base around it.

“Any adviser is offered the opportunity to buy into the business after two years, this gives security to the staff and succession for the business,” Martin said.

“If we keep growing then we need to have succession plans in place and would rather that be a strong team than having to merge with another firm.”

Craig West, founder of Succession Plus, added this type of succession plan made it less likely for younger staff to jump ship once they completed their training.

“It is difficult to include a 55-year-old in a succession plan so it is better to have someone younger so you can start earlier and have plenty of time available to transition them,” West said.

“There is also the risk that once an adviser has completed their training that they will leave to start their own firm but if you lock them in with equity then they feel aligned to the business and have a pre-determined pathway so the transition risk is lower.”

While Martin was optimistic of the benefits of employing younger staff, he acknowledged it was easier to do so as a self-licenced business as costs were lower. To add an authorised representative at a self-licenced firm, he said, would cost around $10,000 a year compared to $25,000 a year if the firm was part of a big licensee group.

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