The research, conducted by Adviser Ratings, surveyed academics from nine universities offering financial planning courses and found that just 28 per cent of students were currently making their way into the advice industry after enrolling in an undergraduate degree.
Worryingly, the survey found that 44 per cent of financial planning students were not getting to the end of their degree at all, while the remaining 28 per cent found work in other fields than financial advice.
When asked what barriers existed to students finding a role in advice, the number one concern cited by academics in the field was the introduction of the professional year.
This was followed by ongoing negative perceptions of advisers by the public, as well as the fact that there was no clear pathway to a career in advice.
The report came to the conclusion that while the professional year requirements were “set in stone” from a legal perspective, it was hoped that the processes around this would become more defined over time, helping more licensees to take on provisional advisers.
“There appears to a disparity of views amongst advice firms about exactly what is required, perpetuated by inconsistent guidance from FASEA and different approaches taken by licensees according to how they view their role and the risk attached to their responsibility for the new entrant,” the report stated.
“With relatively few advisers taking part in this process – there are only 16 advisers listed as ‘provisional’ at the moment – these participants form the vanguard that will potentially smooth the progression of the transition into advice for those that follow.”
There was also more that advice institutions should do in marketing the advantages of a career in advice to both the public and university students, the report suggested.
“Arguably the industry itself has not done itself any favours in promoting the benefits of advice to the general public in order to change perceptions,” the report said.
“Nor has the industry done a great job marketing into the universities to promote interest and win more students across from other courses. As an example, there are approximately 100,000 accounting students enrolled nationally that represent a huge pool of talent that should be targeted for conversion.”
I had an “opportunity” (if that’s what you call it) some years ago to buy into a financial planning practice. I THANK GOD EVERY DAY THAT I DIDN’T!!! Any young graduates reading this… I have 4 words for you….RUN THE OTHER WAY
I’m surprised the figure is as high as 28% entering financial planning. I’d be interested to see the figure remaining after 3 years once this time is up. I’ve told many people of university age to become an accountant — its structured, better paying, has more flexibility in relation to job options and realistically will have replaced advisers in 5 years.
Well done regulatory idiots, you have made it a certainty that no one in their right mind would wish to enter the profession for the cost and effort required to pass the degree and then only to be faced with mind bending nonsensical compliance that suits no purpose other than to run up costs. So it is off the the industry super funds for most new clients, (which of course was your intention all the time). You complete retards, who put your cards in the wall and expect taxpayer dollars to come out of it. If you ever ran a business and actually put the money in the wall in the first place you may have a better idea. You are corrupt, duplicitous and stinking rotten to the core. Why would any young graduate sign up?
Whoops. This is what happens when you fiddle with things that you don’t understand.
The Professional Year is an opportunity to appropriately train and excite graduates into careers. However currently with the way FASEA and Legislation are set up, and the challenges to the industry all over, there are hardly any being offered due to complexity and cost. The Government needs to assist with traineeship funding very quickly, or all will be lost.
The government is broke.
Why would anyone in the industry currently, in good faith recommend to someone to proceed down the path of being an adviser?
This industry has been butchered.
I’m not sure how most practices could even afford the time to offer someone a professional year at present.
I guess that’s what years of over-regulation does to an industry. Ultimately society as a whole will foot the bill of an under-resourced advice industry.
What happens when the Govt buries the industry with ridiculous red tape Opt In legislation. The new graduates have worked out that they cannot afford to service young new clients, at a low annual fee (that FDS Opt Out makes possible).
Don’t worry guys there’s a few hundred candidates studying FP at the moment, that will replace the 10-15,000 that are leaving or have left in the past couple years right??
My 16 year old nephew asked me if he can come and do work experience with me but I told him not to bother. I suggested that he consider a career in engineering or something similar. I will never recover from the mental anguish I have suffered as an owner of a small FP business in the last few years. The stress & fear I face daily is not something I would not wish on anyone let alone someone I care for. I love what I do, I love helping clients but if I could turn back the clock 20 years I would never had entered this Industry.
This industry will only survive servicing the wealthy and there is no business model that can efficiently service every day people. This is a complete travesty & the blame lies directly at the feet of the politicians (this includes you Jane Hume & Stephen Jones). ASIC, the media, FPA and anyone else we wish to point the finger at do not make the laws. Past & present financial services ministers have now overseen the complete over regulation of a service that is desperately needed by the public and it has just about been regulated out of existence.
Only when current day financial planners (not universities, teachers, regulators, BDM’s, Industry bodies, journalists, Industry leaches) have a sense of confidence and pride in this industry will we speak to our children, nieces, nephews & those of our friends and encourage them to enter this industry. Why would we encourage them now?
To all new planners -Welcome to the advice world.
• You will apply ethics in your interactions (Based on a set criteria no one can fully explain or put into practice-FARSA-if you get it wrong according to our beliefs –your out.
Unless you work for an industry fund –than the rule does not apply.
• You will abide by all laws and regulations and explain your advice in explicit detail to every client at every interaction, you will provide 100 page SOA’s , provide full disclosure at every opportunity and on an ongoing basis, and you will obtain client signatures – a dozen or so will do. Your advise will be simple, easy to understand and inexpensive – should you fail at this task ASIC will have your guts for garters- Unless you work for an industry fund –than the rule does not apply.
• You will answer to AFCA should any grumble be made again you – they will use their judgement to find you guilty using the law or any interpretation they see fit. In the unlikely event that you are found to have made no mistake – the process and costs involved will most likely end you career.
Well said
FARSEA, how can you spin these numbers to sound good ???
FARSEA the lack of your Ethics and BS spin is astounding.
Better question: ask existing advisers if they had another option would they leave the industry? That figure would be scary! And rest assured as an adviser for 25 years, I love our industry and the help we provide clients. Once is was 80% help & 20% compliance, and sadly now the reverse. Yes we need better compliance, but at what impact to the key focus of help.
I have clients that work as a manager for Coles and Woolworths that get paid more than the normal salaried advisers get that I know both in the bank and industry funds for less risk..
Okay, when existing advice numbers are shrinking, roles for existing advisers disappearing, how does that translate into opportunities for the new?
Is Financial Advice a good place to build a future?
There are better opportunities for graduates elsewhere… 16 provisional says it all.
Advice is in trouble, no getting around it…
collapse is imminent