If you think it’s already here, there’s a way to go!
Over the last 12+ months, change has already begun with many licensees moving to minimum education standards that mirror proposals for the authorising of all new financial planners.
These proposed (and expected) changes will impact FP businesses in two ways:
- A number of ageing financial planners who don’t meet the new minimum will choose to retire from delivering advice at some point before 2024 (or the date that is ultimately agreed).
- Many new entrants to the industry will come from young graduates similar to professional services today. As we know from accounting and law, pathways to delivering advice do not happen overnight. It takes many years of experiential learning, continuous education and engagement before advice is independently delivered.
These two factors will create a “Scarcity Window For Talent” if the industry does not prepare as we progress towards being recognised as a profession.
And with scarcity comes opportunity
Opportunity for those experienced, well educated business owners and advisers with demonstrated ethics and quality technical and engagement skill. Opportunity for new entrants with a focus and belief that professional advice can be delivered by the industry. That they are the future.
Di Johnson, Professor Mark Brimble from Griffith University and Zanetti Recruitment & Consulting have collaborated and recently published a paper in the Financial Planning Research Journal titled “Industry demand for financial planning graduates” – Click on this link for the full report.
The research completed with financial planning practices nationally, coupled with the face to face engagement with business owners and managers, shows a growing demand and emphasis on graduate recruitment.
It also shows that business scale is critical to create a long term opportunity for both the candidate and the business (career path, staff retention and business productivity). Internal succession becomes increasingly difficult for owners without a structured and mature pipeline and pathway within a business.
Feedback from business owners is quite diverse
- “It is extremely difficult to manage expectation of Gen Y entrants. They generally want to achieve so much in very little time so staff retention becomes very challenging”
- “We hired a graduate over 12 months ago and it has been great. It’s not about the knowledge they have but their character and ability to relate to people”
- “The best planners have not just technical skills but also empathy, wisdom, and social graces”
We are partially responsible for the problem!
Interestingly, the industry has created the perception that you can graduate (or transition from another industry/profession) and become a financial planner within a few months. This still exists in some cases so we just can’t blame generational differences, we need to accept we’ve also created the perception and therefore the problem. It’s hard to retain staff when offers come from other businesses that allow your graduates to potentially be an adviser far quicker. “My employer does not value me as much as the prospective employer does!” We’ve seen how accelerating a graduate to advice too quickly can have a devastating effect on client relationships and on the graduate’s confidence – especially if too great a sales focus is bestowed upon them too early.
We need to live the future now
Having attended Christmas drinks for a national client with 50 staff in Brisbane, the CEO described their business not as a financial planning firm but as a professional services firm. This is evident through their pathways of development. A graduate will have exposure to many components of the business, mentored over time and experience the delivery of professional advice at every level. It may be 5 to 10 years before they are delivering advice independently to clients of this firm. They are living the future now.
Building relationships with Universities
After presenting to a group of 40 practice owners in Sydney, one principal from a Victorian practice with 20 staff told me he had aligned with the local university over 5 years ago and 95% of all recruitment is now coming from graduates. His experience has been very rewarding for the business.
ZRC has a strong relationship with Griffith and is growing with other Universities/RTO’s in the Queensland market. Many Commerce, Economics, and Financial Planning students and graduates do not yet fully understand the industry, the diversity of opportunity and satisfaction that comes from being a professional planner.
We’ve found that engagement at two levels is key to the success of attracting productive quality graduates.
1. Our education on the industry, career pathway and how the professional firms we work with operate.
2. A structured program of on-the-job career readiness training (practical application – e.g. file maintenance, FP software applications, non advice client engagement, platform, fund manager and insurance application processes).
As ZRC develops, educates and screens networks of students with not just the intelligence but desire, ethics, enthusiasm, EQ and realistic time frames to become a professional adviser, more opportunity will arise for the businesses we support.
If you’d like to know more about how we can support your business to understand these changes and recruit quality staff, please contact us at [email protected] or call 07 32299554.