In this blog, we hear how Australia has similar challenges with recruitment as the UK, from Michael Osbourne of 123 Financial Group.
I read recently that the current ratio of Financial Planners leaving to joining the industry is 100:1. If this is true, we need to do something now!
When you combine this with the “Professional Year” for new entrants to the profession you quickly see the GAP getting bigger and bigger by the week!
A specialist recruiter to the Financial Planning and Accounting professions stated recently that they expect to place approximately 120 tertiary students into financial planning firms in the next 12 months. They expect the process of these students moving from graduate to being a sufficiently experienced financial planner to take a few years.
Do we have the capacity to train and supervise these new recruits?
Onboarding of a new recruit means that each recruit needs to be supervised for 1,600 hours of work and training (that’s 42 weeks at 38 hours per week), including 100 hours of structured training and education and 1,500 hours of work and supervised experience. Who can afford to do this and who has the time?
The industry body needs to start thinking about this! A lot of the big players in the financial planning game are exiting from their advice offering and they are the ones that probably have the funds to train and educate the future Financial Planners in Australia. I agree we need to make our industry a well and respected profession. We have been longing to be recognised as a profession and to make it a normal add on for people to have a Financial Planner in their suite of professionals they see each year.
Start introducing financial planning at the grass roots!
We like to see ourselves as a sporting nation in Australia! There seems to be a program for grass roots development across all the main sports in Australia! We have an Australian Institute of Sport where 12 – 18 year old’s are offered grants to cover costs associated with participation in an eligible competition. Now I’m in no way saying we should change the way we develop of our kids in their sporting talents but why aren’t we doing the same thing for kids to help them understand the most important thing in their life of managing and understanding basic skills in financial Planning.
I believe we need to start earlier then University and start setting up programs in year 9 through year 12 at High School. This will introduce Financial Planning earlier in life and create an interest to study and develop their knowledge in this area. We would increase the amount going in at the small end of the funnel to help the funnel go back in the right direction quicker.We need a Financial Planner Institute to help develop these new entrants.
For the ones that get the education but select a different field to start their career in, this may be a controversial result of grass roots training for our industry but it also could mean we have better educated clients that understand the need for the guidance of a Financial Planner.
It could also mean that less people may need the help of a Financial Planner for all of their needs. It could even reduce the cost of advice if we are only providing advice in certain areas they need.
Let’s rewind back to 2003 when I first decided to change careers from a sales role in the Architectural specification world to the world of Financial Advice.
I spent the next 12 months whilst working in my previous profession studying the 4 subjects (the first subject being fill in the missing words in this text) needed to become a Financial Planner. I got my first role as a Wealth Manager and before I knew it, I was meeting clients and trying to give them advice.
If I had my time over, I would have started in a support or paraplanning role to in-bed the 12 months of study I did to become a Financial Planner. Instead I came straight in as a Financial Planner and it took me 4-5 years across two roles to be knowledgeable enough to become a successful and valuable employee.
How do we make it more attractive?
I heard at a recent Industry event that there is currently no set system to track the professional year. One large insurance provider is working with the one person to complete the Professional Year so far in Australia to develop this template. We need to make sure we are setting the new entrants up for success as quick as possible. We don’t want them to stumble around in the industry for 4-5 years. We want them to come in with a bank of knowledge and ready to be a sponge to learn off their Professional Year mentors!
Who knows maybe at the Australian Institute of Financial Planners!