As corporations slashed tens of thousands of jobs across the financial services industry amid the global financial crisis (GFC), it quickly became evident that hiring activity in the sector would not peak again for some time.
More than two years on, in the financial planning industry fewer new entrants are coming on board with some experts saying the sector has possibly lost some of its appeal. Industry heads have speculated it could be a consequence of multiple factors, including bad publicity surrounding the sector as a result of high-profile company collapses that impacted on a significant number of mum and dad investors at the height of the GFC.
With investment markets recovering considerably following the market downturn and the government's Future of Financial Advice (FOFA) reforms aiming to tidy up the industry, advice businesses have steadily been elevating recruitment targets ever since.
This time, however, they say it is not just to bolster in-house skills, resources and efficiencies, but to prepare for and absorb any additional costs that may result due to legislative changes.
Dealer groups say as recruitment strategies are put back into play, they're conscious that member firms are mindful about the future, so licensees are scrutinising value propositions to ensure they can not only recruit, but retain and support advisers during the changes ahead.
Aware there is also a lack of new entrants joining the industry, licensees are injecting resources into various styles of training academies to attract the next generation of advisers.
Industry heads say while recruitment cannot continue upwards at this pace, hiring activity is still not at pre-GFC levels but is unlikely to decrease in light of changes still to come out of FOFA.
Either way, experts believe that as greater confidence begins to spread to all corners of the industry that the war for talent will break out across the sector once more.
State of the market
According to eJobs Recruitment Specialists, jobs in the financial planning industry were up 21 per cent in January 2011 in comparison to the same time in 2010.
EJobs managing director and financial planning recruitment manager Trevor Punnett says while these figures are nowhere near pre-November 2008 levels, they are encouraging. "We see demand for industry staff continuing to rise over the next few months, particularly as practices look to grow and/or acquire or merge their businesses post the GFC, with the predicted rise of investment markets continuing in 2011 supporting that trend," Punnett says.
"The further establishment and consolidation of fee-for-service business models and the move towards implementing new requirements as part of FOFA are also increasing the need for staff."
He says one would suspect that having had comparatively low numbers of industry roles over the past several months, certainly when compared to pre-November 2008 levels, that there would be numerous candidates competing with each other for job opportunities. "This, however, is not the case as there appears to be few qualified and adequately experienced candidates for roles in areas such as paraplanning and financial planning," he says.
"This could be a consequence of candidates already being employed, their employers doing a better job of hanging on to them, or because they still feel insecure about moving post the GFC, or because advertised roles are not offering salaries high enough to risk moving."
He says there certainly appears to be a scramble to secure the few candidates available.
"We're also seeing less new talent enter the industry, which could potentially be illustrative of an industry that has lost a bit of glamour and charisma over recent times and its spot as a desirable industry to establish one's career," he says.
"We also think it's doubtful, at this point in time, to assume that the proposed increases in educational criteria will help win back more people into the industry. "Before this is introduced, the financial planning sector needs to regain or reposition itself as the vital and vibrant service industry it was regarded as being not so long ago.
"Perhaps the industry should also consider that it's not being successful in adequately differentiating its services from other financial services professionals, such as accountants, insurance and mortgage brokers."
He says despite this, there are some organisations that are successfully attracting new advisers, particularly through their apprenticeship-style academies, and successfully integrating them into member firms or setting them up with their own clients and/or referral sources.
Financial Recruitment Group state manager for New South Wales Conor Donoghue says roles right across the industry are being advertised and there are certainly more project and contract roles being offered, particularly in cases where employers need help to fill a gap in the short term.
"Employers are looking for people in distribution, compliance, professional standards, for those who have skills in tool development, with a lot of the majors with multiple advice businesses also putting greater emphasis on growing their networks via internal recruiters," Donoghue says.
"Recruiting internally is still seen as hugely beneficial as well, as talent within organisations can be retained and at the same time reduces hiring and training costs."
He says while hiring is picking up, there is still an air of cautiousness among candidates to change employers due to the fear of the unknown. "For this reason if candidates do move, they're going to be looking at more than financial incentives, but the leader of the organisation as well as the culture, position, the services offered and stability of the business, particularly in light of industry reforms," he says.
"Overall, people probably expected a bigger upsurge in recruitment than what has actually transpired and while there has been substantial growth in hiring activity, it has stabilised somewhat, which is likely to be the case for the rest of 2011."
Financial recruitment firm Profusion director Simone Mears agrees the employment market has improved significantly, but it was likely to remain steady for the remainder of the year.
"While there is a degree of cautiousness across financial services, hiring within dealer groups is very robust right now, with demand for advisers, paraplanners, technical research, practice management, compliance and recruitment people still strong."
Mears says while she doesn't see the industry facing a chronic talent shortage for two to three years, like what was witnessed in pre-GFC times, it is something to be mindful about.
"The big issues for wealth businesses are not just talent acquisition but also retention and succession," she says.
"Particularly with the landscape of the financial planning sector changing, businesses need to be mindful of not only remuneration but also the opportunities they can offer.
"Advice businesses need to ask whether they have the brand, product and services that really make their offer compelling to take to market, particularly as growth in the industry will eventually outweigh the supply of talent." Effects of FOFA and harmonising university curriculums
Industry heads have differing opinions as to the extent to which the advice job market could be impacted on by changes coming out of FOFA and the FPA working to harmonise the financial planning curriculum across Australian universities by 2012.
Donoghue says there is a lot of uncertainty around FOFA, but at the end of the day reforms can only increase professionalism, which does have the ability to increase the number of people wanting to join the industry following the bad publicity the industry endured during the GFC.
Axa network development general manager Paul Williams says while FOFA does raise a range of concerns, those licensees that as a consequence are ramping up practice development programs and workshops to get member firms future ready, are creating a competitive edge.
"We're helping advisers across all our dealer groups with the necessary changes, providing them with the necessary resources and keeping them informed, and that certainly helps us to position our licensees as employers of choice in the market," Williams says.
Independent dealer group Synchron director Don Trapnell says dealer groups that are on the front foot with FOFA certainly stand out as employers, but at the same time licensees that are changing too much when the outcomes from FOFA have not yet been determined, could also be putting themselves at a disadvantage and making advisers more fearful.
"I don't think dealer groups that leave the starting block before the gun has even gone off is necessarily the strategy advisers like," Trapnell says.
"I think it's important to make steps towards the change but not jump in head first."
MLC general manager of business development Peter Greenaway says one thing for certain is that some planners have brought their retirement plans forward to avoid going through another raft of legislative changes, which is increasing the need to recruit and replace outgoing talent.
"The planned introduction of a fiduciary duty and the removal of commissions are all working towards attracting new talent to our industry and as public perception of financial planning improves, more people will no doubt consider joining our industry," Greenaway says.
Meanwhile, industry heads agree that standardising the curriculum in universities will also help the sector move towards establishing itself as a profession.
How dealer groups are positioning their offer
Williams says Axa last year combined its recruitment teams across its various licensee businesses - Axa Financial Planning, Charter Financial Planning, Genesys Wealth Advisers, ipac, Jigsaw Support, Tynan McKenzie and Quadrant Securities - so it could take a choice of groups, models, brands and platforms to different styles of candidates.
He says that decision was also probably one of the big factors as to why the group has built its biggest recruitment pipeline in recent years. "I think advisers have been attracted to us because of our breadth of acquisition and succession solutions, and our ability to provide advisers with more face-to-face dealer group support and marketing assistance when trying to generate new clients," he says.
"Apart from our recruitment aspirations at a dealer level, increasing dealer resources is also being driven by member firms that have also expressed interest in growing their businesses." He says to support advisers with their growth objectives and amid reforms, beefing up dealer services and resources goes a long way in attracting talent.
While it has been the intention of others, the group's strategy has not been to pursue inexperienced advisers or candidates outside the industry, he says.
"One way we have been very successful in recruiting new but experienced talent is through our Discovery Program, which Genesys launched last year and which has helped Axa Financial Planning and Charter Financial Planning recruit over 330 experienced advisers since 2003," he says.
As part of the program, licensees buy clients from existing advisers and sell them to new entrants within the dealer group over a deferred period of time to assist them in becoming practice owners. "There are a lot of experienced, qualified and great advisers out there that don't have the ability to buy equity, so we help them become business owners by assisting them in attaining their own book of clients, which can then translate into equity value," Williams says.
"We do talk to a lot of people to achieve those numbers and a lot of them do tend to be bank advisers disillusioned by the banking models and who want to have equity in their businesses and build more sustainable client relationships."
Greenaway says MLC also has one recruitment team that can help place candidates into its various businesses, including Godfrey Pembroke, NAB Financial Planning, Garvan, Apogee and MLC Financial Planning, as well as Meritum Financial Group. "While we are always looking to grow our network, we are not really looking to bolster dealer resources at this time because for a long time we've had the most extensive range of dealer services in the industry, which is backed up by the feedback we get from new advisers," he says.
"It has been a bit of a well-kept secret I guess you could say, but even when we did an analysis of why candidates joined us, the overall licensee offer was the big one.
"New advisers liked the practice development support they got to grow a better business. They liked our transition to fee workshops and the resources we had to assist them with everything from business planning and succession planning, to compliance and software functionality.
"They were confident in our research and approved product lists, and happy with their ability to sell to or access new clients directly from the licensee."
He says MLC is recognised as having one of the most comprehensive support capabilities for experienced, new and early-growth businesses in the profession, giving mention to initiatives such as the Business Owner Mentor Program, MLC Advice Business School, MLC Pathway to Advice Excellence, Adviser Scholarship Program, Connect for Growth and Referral Partner Program.
"As competition in recruitment heats up, I think it's also interesting to note that other licensees are more often these days using their dealer support services to attract new advisers, whereas in the past there was a lot more concentration on purely the financial incentives," he says.
Recruiting next generation advisers
Synchron is a dealer group that has experienced continued growth in recent years and which specifically looks to recruit younger advisers to the industry.
Trapnell says the dealer group doesn't have an active recruitment formula per se, but instead aims to create an environment where it is easy for aspiring candidates to approach Synchron through its website, with state managers there to talk to candidates as well. "The directors of Synchron sat down in 2006 to discuss the average age of advisers across the group, which at the time was 59, as we knew we wouldn't have a business in five years' time unless we did something about it," he says.
"Through the development of new programs, introducing new technologies to the business and other various initiatives, we reduced the average age of Synchron advisers to 48 in 2010, which we did not do by losing older advisers but through attracting younger ones."
According to Trapnell, Synchron's NextGen program, which offers an annual three-day soft skills training course, goes a long way in attracting younger advisers, as will the group's soon to be launched mentoring program, which is currently in the advanced stages of development. "Our adoption of new technology, including our adaption to iPad and iPhone technology, is also of great interest to all new talent entering the industry," he says.
"Advisers are attracted to the fact they can do presentations, complete and sign application forms, submit documents to other service providers and send short video messages wherever they might be located, all from their iPad."
He says another reason the dealer group has been attractive to younger advisers is because unlike other licensees, rebates from fund managers paid to advisers by Synchron are done daily.
"Cash flow can be a big issue for new advisers entering the industry, so we ensure any money owing to firms are made daily rather than fortnightly or monthly as other licensees do," he says.
Trapnell says it's critical the industry brings down the average age of advisers.
"We need new blood so clients can get to know the younger advisers that will be there for them as the older generations retire and they take over. We need to do it for the older advisers who have the wealth of knowledge and who need to pass that on before they exit. And we also need it for the country because if we don't have a strong adviser force going into the future, issues such as poor financial literacy and Australia's underinsurance problem will only escalate further," he says.
