Working with Delta Consulting at the University of California, Berkeley, Kaplan Professional conducted research exploring the perceptions of financial advice across a variety of stakeholders.
In conducting the research, they surveyed 750 people, including existing advisers, new entrants, licensees, and consumers.
Across almost all of the groups surveyed, there was a shared concern for the lack of practical experience and soft skills in new advisers entering the field.
Industry professionals
Younger non-advisers looking to enter the field specifically noted in themselves a need to develop soft skills and new entrants said they, too, need to improve these skills and gain more industry experience.
These new entrants also noted a need for career support and mentorship from experienced industry professionals and assistance to improve soft skills with supplementary real-world projects.
While older, experienced advisers said they enjoyed sharing knowledge and expertise with the younger generation of advisers, they also noted a dislike of having to “handhold” new hires as they learn the ropes, and new hires lacking soft skills.
When looking at employers and new entrant supervisors, they said they want advisers who excel in building and maintaining relationships, further highlighting the importance of soft skills in new advisers.
Consumer responses
The research found that overall, advice consumers heading towards retirement value industry experience, good communication skills, and an attention to detail in their financial adviser.
When asked if they noticed any gaps in the knowledge or skill sets of new hires in the finance industry, a consumer respondent said: “As training standards and educational requirements have been improved in recent years, new hires just need to get experience via work experience with clients.”
When asked the same question, another respondent said: “Certainly, the people skills are a gap. Having the ability to understand how different clients like to engage. Building trust with the client is also a crucial component of advice.”
Both responses highlight that although the education prospective advisers are receiving is adequate, they are still lacking the necessary experience and soft skills needed to meet the expectations of clients.
The key takeaway the research noted from consumers was: “When looking for a financial adviser, the older generation values a combination of quality industry experience, educational qualifications, and communication.”
Overall, the research found that only 22 per cent of younger generation advisers completed an internship or other practical learning experience prior to employment, compared with 39 per cent of the older generation.
Given the broader concern expressed by the lack of soft skills and industry experience in new entrants, this was highlighted by respondents as an issue that needed to be addressed.
Amazing – who knew?