There has only been a slight increase in the overall number of financial planners in the past 12 months, and most growth now appears to be in the self-employed sector.
This follows a period of declining adviser numbers, which Peter Dawson, executive director at the Financial Recruitment Group, believes was the result of higher performance expectations by dealer groups, and the retirement of sizeable numbers of baby boomer generation planners.
“Total planner numbers stabilised through 2004 and over the last 12 months numbers have marginally increased with significant growth being recorded in the self-employed segment, with AMP and Godfrey Pembroke in the forefront of successful planner recruitment programmes,” he says.
The introduction of the Financial Services Reform Act caused some in the industry to speculate that one-man-band advisers might be tempted to forgo business ownership in favour of returning to the life of a salaried planner, and the compliance support that comes with the role. But to date, there has been no industry data to support this theory.
Instead, those advisers struggling with increased compliance responsibilities are more likely to band together, according to Alison Loader, head of Profusion Recruitment.
“We have seen advisers who have run their own businesses team up with other advisers in order to share the administration load,” she says.
Paul Forbes, head of distribution at Guardian, adds: “Fundamentally, most planners are small business people and make awful employees. If you have been running your own practice, and go into a regimented structure where you aren’t really building a business, and have a lot of constraints you didn’t have in your previous life, then that is going to be an issue.”
But Forbes does concede that regulatory responsibilities may be too much for some planners.
“I don’t think they would necessarily go for a salary base, but they might consider going back into a licence.”
Andrew Creaser, deputy managing director of Genesys Wealth Advisers, believes that “you will get the best of an adviser in a self-employed type scenario”.
He explains: “If you look at professional services in general, such as medics, dentists, accountants or lawyers, generally the more successful ones tend to be self-employed in partnership arrangements, as distinct from being physically on someone’s payroll.
“The employer, lawyer or accountant tends to be employed to gain experience, beyond which they go out and become self-employed.”
Creaser also believes that salaried planners are more likely to be concentrated in client-service type roles.
“Those advisers tend to attract a different salary and package arrangement because they are providing an ongoing service to existing clients, rather than being responsible to go out over the wall and find new clients,” he says.
So the future of salaried planners is somewhat unclear — first, because there may be fewer jobs available, and second because dealer group recruiters are looking for advisers with a portable client base.
Dawson says: “There will be exceptions with the Commonwealth Bank and ANZ increasing numbers, but the self-employed segment is the clear leader.”
However, Dawson does say that the trend for small to medium dealer groups to build wealth management infrastructure may offer job opportunities for salaried planners.
“The appeal with these groups is that they don’t require planners to have a client base and therefore may recruit from the salaried channel.”
