Financial advisers could expect large sign-on bonuses as the norm, as dealer groups offer significant sums, according to recruitment groups.
“A lot of the broking and wealth management houses will have to be offering sign-ons to get established advisers to move and bring their client book with them,” Robert Walters director of banking and financial services, Andrew Hanson told InvestorDaily.
“Retail banks that offer salary plus bonuses won’t really see any skew however, the pure wealth and broking houses that run a commission-based structure with their advisers might have to lift their ‘draw’, retainer and salaries offered, but probably not significantly.”
The implementation of the Future of Financial Advice (FOFA) has driven adviser fears around the value and worth of their businesses post-FOFA, Financial Recruitment Group (FRG) New South Wales state manager Conor Donoghue said.
“Whether that was true or not, there’s a lot of uncertainty so a lot of larger institutions are looking to capitalise on that,” Donoghue said.
“I don’t necessarily think that there’s a defined expectation from all financial planners to sell the business only if there is going to be those large transition fees and sign-on bonuses.”
Some businesses and advisers will certainly accept the bonus, due to the fact that some institutions have been very vocal about paying them and in the case of certain practices, which might not have a succession plan for example, transition fees will be expected, he said.
“Financial planners, in most cases, are small business owners so it’s no different to big corporate buying up lots of smaller businesses,” he said.
“The financial planners I’ve spoken to who have sold their practices for some of those fees have only done it if there’s been a very good service offer for their clients.
“That’s often missed – that perhaps some of the larger institutions can actually service clients to a higher degree than what the smaller businesses can do themselves.”
He said businesses that paid sign-on fees will have a higher expectation that they are able to quickly get a return on that investment, however it’s yet to be seen as it’s too early to tell.
Hiring within wealth management is still being dominated by the larger financial institutions and the Big Four banks, Hanson said.
“Financial planners with a strong track record in building their funds under management are highest in demand with these organisations now seeking high performing individuals,” he said.
“There is still a real push on revenue-generating front line advisers with established book of clients.”
Qualified and well-established financial advisers continue to be in high demand, as well as senior and private bank advisers, Hanson said.
“In essence, there is a shortage of experienced financial planners that have exposure to complex wealth and investment strategies,” he said, adding that certified financial planners with five to six years experience are also in high demand.
“I wouldn’t say that we’re sitting here with an optimistic outlook expecting that things are about to boom in the second half of this year.”
On the other hand, FRG has seen financial advice numbers grow since the beginning of the year, Donoghue said.
“At this moment we’re hiring more staff in NSW and Victoria despite downturn stories, so there have been redundancies but they’re not the mainstream yet within wealth management,” he said.
“Financial advice is still a very stable career but the key functions and jobs are actually changing.”
A number of businesses were downsizing but it was predominantly occurring in the back office, he said.
