Talent and the perfect storm

By Jayson Forrest - Managing Editor  - IMAP Perspectives

As adviser numbers shrink, attracting, training, paying and retaining financial advisers is one of the most important issues facing businesses. Alisdair Barr (Striver), Matthew Swieconek (Findex) and Jonathan Scholes (Findex) discuss how advice practices are overcoming this challenge.

According to Wealth Data, the latest figures released by ASIC in June this year has the current number of financial advisers in Australia sitting at 16,530 - a number which continues a downward trajectory. The reasons advisers are leaving the profession are numerous, including: retirement; stress and overwork; FASEA’s education requirements; regulatory and compliance demands; as well as business profitability.

“Add to this the 300 students Adviser Ratings says are graduating with an approved (financial planning) degree each year, but of whom only half actually join the profession,” says Alisdair Barr - the Founder and CEO of Striver. “It’s clear there are not enough new entrants coming into the profession to replace those leaving it.”

Whatever the reason for the decline in adviser numbers, there’s no escaping the fact that advisers are departing the profession at a time when the demand for advice has never been greater.

“We’re seeing the perfect storm,” says Alisdair. “Not only are experienced advisers leaving the profession for various reasons, we are also increasingly seeing graduates going overseas for jobs. This is creating a talent hole.”

According to Alisdair, the profession is also increasingly competing against “hip and trendy companies”, like Snapchat and Google, which can be more appealing to young graduates than traditional advice practices.

From a business perspective, Matthew Swieconek - Managing Partner Wealth Management at Findex - agrees that the recruitment market has tightened significantly, with the talent pool reducing considerably.

“It’s become a supply and demand issue,” says Matthew. “We’re seeing salary expectations increasing significantly. A couple of recent candidates were asking for over 30 per cent of what our salary offering actually was. So, we have had to recalibrate our offer as a result of these higher salary expectations.

“We are also getting a more discerning applicant for our positions. These people aren’t just looking at the base salary, but they are interested in: what our bonus structure looks like; what the culture of the business is like; whether there is a program of equity ownership in the business; what their career development looks like; and if workplace flexibility is available.”

Matthew acknowledges that Findex has had to step up its offering for new entrants, as well as  existing staff in order to retain them. He describes Findex as a “work from home business”. Employees have complete flexibility of either working from home or the office. However, he says most staff opt for a split approach, choosing to work some days from the office and other days from home.

“Our workplace flexibility is an enormous selling point for attracting new talent to our business. That’s because people have increasingly set up their lives to be closer to home. So, the opportunity to work from home is very appealing to a growing number of people.”

Jonathan Scholes - Regional Financial Planning Leader Victoria at Findex - adds that new applicants are also undertaking greater due diligence of businesses before deciding whether to join.

“This is also forcing the hand of licensees and dealer groups to retain key staff. We’re seeing a lot of counter-offers coming from licensees, as they seek to retain these talented individuals,” says Jonathan. “But this issue is not just confined to advisers, we’re also seeing it extend across other parts of the advice business, like client services and paraplanning.”

In order to deal with this competitive market, Findex is progressively taking a ‘grassroots’ approach to the way it recruits, including targeting the graduate market.

“So, what we’re doing with graduates who are seeking to undertake their Professional Year with us, is to move them initially into a client services type role. We provide them with a defined career pathway, where graduates are mentored. They start from a client services role and progressively move through the business and eventually, into an adviser role,” says Matthew.

According to Alisdair, the typical approach to recruiting has been to employ an adviser with two or three years’ experience and an established client base, and who brings along their clients. Recruiting this type of adviser means they can begin revenue generating straight away for their new employer.

However, the approach Alisdair prefers is to develop a relationship with a potential new adviser whilst they’re still at university, via mentoring and internships. This is an opportunity for both the business and the individual to get to know each other, and provides a more cost-effective and seamless transition into the business. He believes this approach delivers the best outcome for both employer and employee

While Alisdair believes the industry needs to have a “good crack” at employing young people in the profession, he adds there are also some conundrums around how tertiary education is currently structured in relation to financial planning.

“Compared to the 300 graduates each year with a FASEA approved degree, there are 190,000 graduates annually with a business degree in Australia. This is across accounting, finance, economics, marketing, and public relations. Potentially, that’s a very big pool of talent the profession can draw upon and it’s a piece of the education puzzle that needs to be addressed in terms of recruiting more graduates,” says Alisdair.

Matthew acknowledges that in the wake of the Hayne Royal Commission, the profession has an image problem it needs to tackle. He believes there is still a general lack of understanding about financial planning and what advisers actually do amongst tertiary students.

“This will require more targeted education by the profession to change the perspective of students,” says Matthew. “The key is to start early and do it from the grassroots. We can do that by working with the universities, like providing mentoring and internships for students, which is a great way of creating better brand and vocation awareness.

He confirms that because Findex has a large accounting side of its business, it already has established relationships with a number of universities, where it undertakes roadshows and provides graduate programs. Subsequently, the Findex wealth division has been able to tap into those relationships, where by February next year, 12 new graduates will join the wealth team. 

“So, for us, this brand awareness is working and it’s something we want to do more of by pro-actively engaging with universities,” Matthew says.

Alisdair says the key to attracting new talent to the advice profession is for the entire industry to promote the good news stories of financial planning and to share their positive experiences of working in the profession.

Jonathan agrees: “If you want relationships with people, then financial planning is for you. Most people intrinsically want to deal with other humans, so there is an attractiveness to this profession. Collectively, we need to do a better job at promoting ourselves. This includes sharing our stories about how advice changes the lives of everyday Australians for the better.”

Alisdair Barr is the Founder and CEO of Striver;

Matthew Swieconek is Managing Partner Wealth Management at Findex; and Jonathan Scholes is Regional Financial Planning Leader Victoria at Findex.

They spoke on a session titled - ‘The competition for talent’ - at the 2022 IMAP Advice in Action Conference.