If Simone Mears’ hunch is correct, financial planners will soon be routinely recruited through such Internet-based social networking sites as Facebook, MySpace and Linked-In.
A director of specialist financial services recruitment agency ProfusionExecutive Management, Mears believes the surging popularity of these sites represents a huge opportunity for the passive recruitment of planners.
While she cannot say how exactly passive Internet-based recruitment will work, she believes the process has the potential to help alleviate the current acute shortage of planners, paraplanners, BDMs and others.
“The rise of these social networking groups suggests the way people are interacting with each other is changing profoundly, and recruitment techniques will not be immune to this change,” she said.
“A question for everybody involved in financial planning recruitment is how to tap into a market comprised of people connecting to each other through social networking sites.
“How do we access what we call passive candidates, or those people who aren’t actively looking for a job but, who, if they hear about an opportunity, might be tempted to apply for it.”
A move to passive recruitment as a technique would be part and parcel of profound change underway in the method of attracting, recruiting and retaining financial planning staff, according to Mears.
Changing demographics
“This change is being led by demographics, and it’s forcing us to constantly revaluate our methodologies. You can’t simply depend on traditional methodologies any longer to attract staff.”
One key change evident since the late 1990s is that “we now find ourselves in a position where advertising is not effective anymore in attracting staff”.
Another is in the “explosion in headhunting” as a method of recruitment within the financial planning sector for all levels of employee.
“Headhunting was once confined solely to chief executives and very senior personnel, but it is now used to recruit staff for every type and seniority of financial planning role.”
She said the acute shortage of “planners, paraplanners, BDMs, product managers, and Australian equity analysts is only going to be exacerbated” by demographics over the next 10 years.
“It’s also about a shortage of people who build product for planners, who develop that product, take it to market for them, sell it to them, and service them with technical services and compliance.
Staff retention
As crucial as it is going to be for the planning sector to be able to attract new recruits in future, Mears said the “real challenge is going to be the retention of staff”.
“The statistics are absolutely horrifying on the number of people leaving the sector over the next 10 years, especially when compared with the numbers that are coming in.”
However, she said it is increasingly evident from what firms are offering staff in terms of “contractual flexibility and development opportunities that their whole focus is on the retention of staff”.
“Even the banks, which have traditionally provided training for newcomers and from which other companies have traditionally poached them — are now focusing on retaining their staff.”
Growing your own
Many companies are now launching training and development programs as a way of “growing their own” planners, according to Diane Hamer, general manager of Jonathan Wren Financial Recruitment.
“For example, we’ve been working with a large fund manager to recruit people with transferable skills, such as accountants and banking sector staff, to go through a 12-month training financial planning program.”
Although Hamer herself didn’t say so, the fund manager in question is the Sydney-based AMP Financial Planning Academy, which launched last month.
Housed in state-of-the-art premises in Sydney, the academy comprises two separate training and development programs for planners and paraplanners.
The first batch of 32 financial planner recruits began their first day of the inaugural 13-week ‘Horizons’ program, which will be followed by four refresher courses over the year.
AMPFP intends to accommodate three intakes of Horizons program recruits each year at the state-of-the-art academy, potentially providing the group with more than 90 additional planners a year.
The first academy intake of 32 paraplanner recruits commenced the ‘Planner Pathway’ program last month, which comprises more than 600 hours of training and development over 18 months.
Hamer agreed that headhunting is “going through the roof” in the sector, as organisations, particularly the bigger ones, look to other industries for potential recruits to alleviate the current shortage of planners.
“At the same time we’re finding that people in the other sectors, particularly those working in the relationship management field in banking, are a fertile ground for recruitment to the financial planning sector.
“These people are often providing limited advice to people anyway, and therefore already have exposure to financial planning, and often are keen to be able to offer a wider range of advice.
“In general, there’s a much greater recognition now that financial planning is a growth sector, that there are good jobs available, and that remuneration is quite attractive.”
Remuneration in the planning sector is increasing significantly year on year, she said, with senior planners often being able to “name their own price” to come on board.
The increases are occurring “mainly on the commission side, as opposed to the base side”, Hamer said. “Even paraplanners are getting bonuses to keep them in the business.
“It is proving harder to source experienced paraplanners than planners currently, and part of the reason for this is that employers are finding ways to let paraplanners know they are valued.”
Improving industry profile
Hays Recruitment senior manager Matthew Gowan agreed that financial planning is improving in profile as a profession, not least because of the growth of the sector in the past year.
General numbers for available candidates has probably improved since last year, although the number of positions has “probably increased by more in the last 12 months”, he said.
“It’s also safe to say we’ve seen a slightly better quality of candidates in the past 12 months, as it’s become easier to sell planning as a profession.”
Gowan said planning has become more attractive to candidates that might have only previously looked at it as a pure investment-type of job, such as stock broking.
“There are still options to do some analytical work in planning, but also to advise on a good range of high profile performing products.”
Employers too are showing greater flexibility in considering people from non-planning backgrounds, particularly in the banking sector, with some previous sales or finance experience.
“We’re seeing a lot of work coming through the big banks, as well as the investment banks, as they continue to shore up their numbers.”
In addition, he said employers are also focusing on selling their culture and value proposition to prospective employees.
“Employers now increasingly realise that selling those benefits to candidates is important in a candidate-short marketplace.
“We have being doing a lot more work during the past year at our clients’ request to sell the benefits of their particular organisation.”
Salary packaging
While employers are focused on bringing new blood into the business, there has also been movement by employers to attract senior planners as well.
“Salary packaging is now recognised as important as the overall value proposition they offer, but that on its own will not entice a good planner to move to a new job.
“A good planner will not move just for a per cent here and there, but they may well be motivated by a fairer deal in terms of the workplace culture, realistic performance targets, and work/life balance.”
In this regard, Hays has “definitely seen some movement” of senior planners at the likes of Macquarie, Westpac and NAB, as well as other non-bank institutions, he said.
“These moves generally come down to a little bit more money on offer, sure, but it’s often company profile and culture that seals the deal.”
MLC is experiencing an increase in staff from within other areas of the group who want to move into the planning sector, general manager, advice solutions Greg Miller said.
He attributed this to the organisation’s strong stance on fee for advice as the method of remuneration, which has encouraged more people to see it as a “real profession”.
“If you can actually show that people are being remunerated in a way that’s clear and transparent to the customer, then we think there are a whole lot of people out there who will want to join our industry.
In fact, one of the reasons we have taken our stance on fee for advice is because we think people may be a little put off planning as a profession if they think it’s not held in good esteem by the public.
Miller said the group is currently experiencing a “real shortage” of paraplanners due to growing demand from planners for help with a greater workload, which was in turn putting pressure on paraplanning remuneration.
MLC has recently launched a paraplanning academy to help supply paraplanners to all of its aligned dealer groups: Garvan FP, Apogee, Godfrey Pembroke, and MLC FP.
The paraplanning academy exists alongside MLC Adviser Scholarship Program, which Miller said has put about 100 advisers through it since its launch in February 2005.
A buyer’s market
Sue Viskovic, managing director of Perth-based specialist financial services consultant Elixir Consulting, said employers are being “more creative nowadays in a buyer’s market” to attract planners and paraplanners.
“They are, for example, increasingly structuring bonuses away from cash and into equity in the business in an environment in which planners are looking beyond remuneration as motivation to change jobs.
“It’s a particularly appealing inducement for more experienced advisers, who don’t necessarily want to be an employee for ever.
“It’s also a good opportunity for employers to enable staff to step up to take an interest in the business without necessarily having to come up with a great deal of cash.
“Some businesses are not necessarily all that liquid and don’t necessarily want to be using their cash flows for big bonus payments,” she said.
