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Results 1: New Entrants/Early Career Planners

Results for new entrants reveal a growing interest in the graduate pathways and methods of obtaining access to talent pool. This appears to be very much an emerging interest; however, the majority of firms (85.1%) indicate that they would like to grow their staff numbers in the next five years and 64.5% indicated that they will be seeking graduates for these growth positions (see table 4.1 for details). When firm size is taken into account, it becomes evident that 100% of large firms (over $5 million in gross revenue) indicate that they will be seeking graduates for growth positions compared to 61.8% of SMEs (<$5 million in gross revenue).

Consequently, the discrepancy between the 85.1% of firms indicating intentions to grow staff numbers and the 64.5% intending to recruit graduates, is perhaps an indication of a number of factors:

  • That SMEs with a small number of staff may find it difficult to replace a resource gap with a new staff member who may have less experience. The smaller firm may also not have the breadth of resources to absorb the work while training a less experienced staff member, with any impact on immediate resourcing needs therefore impacting on service to clients and pressure on existing staff.
  • Churning of experienced staff (including financial planners) between firms.
  • Certain roles may require a lower educational standard eg a career CSO.
  • Continued intentions of training career changers without degree qualifications as they progress through current education pathways.

With regards to planning the recruitment of new entrants (whether graduates or otherwise), even when moderate business size is taken into account there is an evident size effect with larger firms more likely to be planning to recruit more new entrants (48% of firms with gross revenue less than $1m; 59% for gross revenue of $1m-$5m; and 86% of firms with gross revenue greater than $5m); have a standard career progression (30% for <$1m; vs 50% for $1m-$5m; vs 71% for >$5m); have a formal induction (69% for <$1m; vs 84% for $1m-$5m; vs 100% for >$5m); and have incentive packages (47% for <$1m; vs 59% for $1m-$5m; vs 90% for >$5m). Larger firms have stronger recruitment intentions (48% for <$1m; vs 59% for $1m-$5m; vs 86% for >$5m). While not as much as for firms over $5m in revenue, all firms have moderate intentions to use graduates to meet these recruitment demands (61% for <$1m; 63% for $1m-$5m; 100% for >$5m). Small, medium-sized and large firms are similar in relation to formal (62%) and informal (95%) training and career planning (67%) offered to new entrants.

Firms of all sizes have a strong desire (78% for <$1m; 83% for $1m-$5m; 92% for >$5m) for a formal graduate recruitment process to be put in place. For smaller organisations in particular, this is largely seen to be indicative of the capacity constraints to take on new entrants including the ability to invest in building relationship with educators and students. This is further supported by the source data with smaller firms (less than $1m) more likely to use online job sites and less likely to use recruitment agencies or go direct to education institutions. Finally, smaller firms (less than $1m) are also more likely to expect administrative staff (receptionists/EA/PA) to have qualifications such as RG146 in comparison to firms with revenue over $2m, most likely reflecting the greater variety in jobs tasks in a smaller office.

Interestingly, of the 54.8% firms who would like to recruit new entrants, overall, 81.8%, indicated that they wanted a structured graduate recruitment and development pathway through the initial years into a financial planning career. This reflects the difficulties that some have in building relationships with education providers and/or their students in order to access this human capital. A structured approach coordinated, for example, by professional associations or education councils in conjunction with the employer could assist in this process and standardise the mechanism for all stakeholders. This is further reflected in the source data with personal networks being the most common recruitment pathway into financial planning for these firms, with 29.4% (or 129 responses, which was the highest recorded number for any one choice in this question) indicating that they use personal networks to recruit new financial planning staff, followed closely by online recruitment sites (17.5% or 77 responses), direct from university (17.3% or 76 responses) or through a recruitment agency (16.9% or 74 responses) (percentages based on total of multiple responses to this question). Furthermore, it appears a majority of firms (65%) state they have a standard career pathway in place for new entrants and many have induction programs and formal/informal training.

In terms of expected qualifications of new entrants, these generally rise from no/low level qualifications for administrative staff (receptionists) through to 45% of respondents expecting new entrant planners to have a Bachelor’s degree or above. This is of particular relevance given the recent moves by some licensee groups, professional bodies and the PJC recommendations regarding qualifications for financial planners to be set at Bachelor degree as a minimum qualification going forward. Thus this data may shift over coming years as these new standards are implemented.

Similar expectations are evident for CSO and paraplanners, while small firms seem to have a slightly higher preference for financial planning specific bachelors and postgraduate qualifications for financial planners.

The analysis above is supported by comments to an open ended question in this section of the survey. In relation to the broader agenda, planners note the need to improve standards and work to put recruitment processes in place:

“It would need to be a structured program with some means of vetting the applicants. It is too hard to recruit when there are large numbers of applications to consider.”
“The Financial Planning profession needs to improve the minimum education standards for new entrants if we are to be taken seriously as a profession.”
“Minimum education standards and experience must be in place before an individual has the opportunity to provide advice.”
“Finding people interested in entering the Financial Planning industry has been hard; negative publicity (eg: SMH pg3 16/8/2014) about the professionalism of Financial Planners does not encourage people to enter the industry.”

There is also evidence of the recognition that new entrants can assist with business growth and development. This is however tempered by other views regarding concerns about general work readiness and the breadth of the skill set of new entrants. For some this raises questions in relation to the pathway for new entrants:

“Undergrads would be good for my growing business – part time, after hours for data input etc. to get a feel for the business.”
“Plan on opening communications with unis and particularly interested in Chinese national graduates.”
“I would like a new person intending to come into the industry and mentor them into a long term career.”
“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.”
“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.”
“I have found graduates have an unrealistic expectation of their ability and knowledge and as such are overpaid for their worth to a professional practice. As a result they can go to a bank and receive higher salaries and bonuses and become corrupted and frankly useless.”
“The industry is now technically driven and is losing key people skills and prospecting ability.”
“Additional note, there is a high level of “selling” involved in financial planning, be it selling yourself or selling the company services and we’ve found that new entrants are not qualified/prepared in this area.”
“It is “Risky” as they historically have no knowledge of the Industry…and Gen Y folk think they should progress from CSO to CEO within 2 years :-)”

Finally, in relation to the issue of skills/attributes in demand, our respondents focus in on soft/interpersonal skills and suggest more needs to be done to prepare new entrants:

“The best planners have not just technical skills but also empathy and wisdom, and the social graces. I think a new entrant pathway should include volunteering, the development of genuine interests outside the profession, communication and presentation skills and manners/deportment! It’s surprising how often I come across even postgraduate degree qualified candidates who struggle to construct a sentence, don’t know how to shake hands and slurp their coffee.”
“Clear articulated passion to work in an environment with client focused outcomes.”
“Work ethic, enthusiasm, attention to detail and excellent writing skills, adaptive and willingness are all the attributes we look for.”
“Personality type (personal ethics included); and personal networking style are considered.”

Overall, it appears there is growing interest in, and recognition of, the role that new entrants play in the financial planning human capital market. While there are some differences between the intentions and structures of small and large firms, overall the results suggest that this will become a more important part of financial planning in the future. This is likely to be also be driven by changing standards across the sector.

It also appears that there is demand for a structured industry graduate recruitment process and for further attention to be given to skills development and general work readiness. Thus in relation to research question 1, we find there is a degree of consensus on the qualifications and support structures for new entrants, although this is likely to evolve over time as the market for qualified and suitable new entrants heats up as new standards for advice are implemented over the next three to five years.

Table 4.1: Summary data for new entrants

Question Responses Frequency %
Do you currently, or would you like to recruit new entrants (e.g. graduates or career changers) to the industry? Yes 103 54.8%
No 85 45.2%
Do you have a standard career progression pathway for new entrants? Yes 70 64.8%
No 38 35.2%
Are new entrants provided with:
A formal induction? Yes 75 78.1%
No 21 31.8%
Formal training in their first two years? Yes 53 61.6%
No 33 38.4%
Informal training in their first two years? Yes 92 94.9%
No 5 5.2%
Incentives Packages Yes 56 62.2%
No 34 37.8%
Career Planning Yes 61 67.0%
No 30 33.0%
Other   3 -
Would you like to see a structured graduate recruitment and development process put in place at the industry level similar to that in other professions such as accounting and law e.g. long-term internships? Yes 153 81.8%
No 34 18.2%
Are you planning to grow staff numbers in the next 5 years? Yes 160 85.1%
No 28 14.9%
For firms with gross revenue of <$500,000 Yes 40 78.4%
No 11 21.6%
For firms with gross revenue of $500,000-$1,000,000 Yes 50 89.3%
No 6 10.7%
For firms with gross revenue of $1,000,001-$2,000,000 Yes 37 80.4%
No 9 19.6%
For firms with gross revenue of $2,000,001-$5,000,000 Yes 22 100%
No 0 0
For firms with gross revenue of >$5,000,000 Yes 11 84.6%
No 2 15.4%
SME firms combined ($0-$5,000,000) Yes 149 85.1%
No 26 14.9%
Are you planning to use graduates for staff growth in the financial planning roles in your firm? Yes 100 64.5%
No 55 35.5%
For firms with gross revenue of <$500,000 Yes 22 55.0%
No 18 45.0%
For firms with gross revenue of $500,000-$1,000,000 Yes 31 66.0%
No 16 34.0%
For firms with gross revenue of $1,000,001-$2,000,000 Yes 22 59.5%
No 15 40.5%
For firms with gross revenue of $2,000,001-$5,000,000 Yes 14 70.0%
No 6 30.0%
For firms with gross revenue of >$5,000,000 Yes 11 100.0%
No 0 0.0%
SME firms combined ($0-$5,000,000) Yes 89 61.8%
No 55 38.2%
Please indicate the following methods that you would most likely use to recruit for new entrants into the financial planning pathway (Multiple responses allowed)     Multiple responses allowed
Direct from a university program   76 17.3%
Recruitment agency   74 16.9%
Online, large job site eg seek,   77 17.5%
Online specialty job sites eg financial planning sites   27 6.2%
Online networking site (eg LinkedIn)   46 10.5%
Personal networks   129 29.4%
Print ads   6 1.4%
Other (please specify)   4 0.9%

Table 4.2: Expected new entrant qualifications

Are there minimum qualifications you would require new entrants to have? Receptionist Personal / Executive Assistant Client Service Officer (CSO) Paraplanner Financial Planner (early entrant)
  # % # % # % # % # %
RG146 26 17.8% 40 26.7% 73 36.5% 51 21.7% 41 14.5%
Diploma of Financial Planning (or equivalent) 3 2.1% 15 10.0% 51 25.5% 74 31.5% 63 22.3%
Advanced Diploma 0 0 2 1.3% 10 5.0% 55 23.4% 48 17.0%
Bachelors (Related) 1 0.7% 5 3.3% 9 4.5% 20 8.5% 46 16.3%
Bachelors (Financial Planning) 0 0 1 0.7% 6 3.0% 28 11.9% 64 22.7%
Postgraduate (Financial Planning) 0 0 0 0 0 0 2 0.9% 18 6.4%
Certified Financial Planner (CFP) 0 0 0 0 0 0 0 0 0 0
None 116 79.5% 87 58.0% 51 25.5% 5 2.1% 2 0.7%

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