Speaking to ifa, Roskow Independent Advisory co-founder Matthew Ross said he is concerned graduates are going to be turned off careers in financial planning because universities will direct them to firms that encourage a sales culture.
“We are going out there to put together a course and say, ‘Look, these are the skills employers are looking for; you haven’t learnt those at university’ – namely, how to complete paperwork, how to do financial modelling, how to write advice and how to use insurance software,” Mr Ross said.
“My concern is [graduates] are going to end up in an AMP Horizons [style of] program where they are going to be taught sales techniques, be given an orphan client list and be told to go cold call them,” Mr Ross said.
“If they are going to go into a firm that is aligned to a product provider, chances are they are going to get in there and go, ‘I thought I was going to be providing real advice’,” he said.
Mr Ross said the financial planning profession is at risk of turning away potential future leaders due to the pervasive culture of product distribution.
“One of my biggest concerns of financial planning is us losing good people, because they finish a degree and then go, ‘Oh, it is all product sales, I hoped it wasn’t’,” Mr Ross said.
He added that a para-planner academy will give him and other business owners the opportunity to find future advisers who show great potential and to find firms that will be best suited to them.
“When we need a new para-planner, we want them to have some more skills, but also to be able to recognise and go, ‘Right, well there is a gun’,” Mr Ross said.
“We also want to link them with other financial planning firms that we think [will mean] they are not going to waste their time here.”
Tim, I agree with what you have said but I wonder if removing APL’s will make a major difference as there are already dealer groups offering significantly discounted dealer group fees for writing higher percentages of THEIR associated products. But completely agree that the debates should be around ADVICE supported by a range of alternative products NOT about PRODUCT. The sooner people realise that everything is around sales. Before a client buys ANYTHING from me, my ADVICE, my PRODUCT, he/she first has to buy into ME! Therefore, the client relationship with ME (the adviser) is paramount. This relationship will take on life if the advice is good, the product is merely the funding mechanism of the advice.
Maybe just maybe the industry ought to recognise qualifications and experience for a change. No requirement to do SOAs and can look outside an APL if holding post grad qual and/or 7 years experience as an example. But for the others, they now have some reason for doing the extra study and staying in the job but have higher levels of supervision until then. You don’t let an intern perform open heart operations do you?
I mean, 15 years in the job with undergrad and post grad degrees and still have to do some disclosure clogged SOA for some life cover or tell someone to change their investments around a bit …fair dinkum.
If Licensees remove APL’s which I believe is the direction we should be moving toward, then more advisers will be able to provide advice which is not conflicted when it comes to product choice. From there the client and the adviser will work out how and when the adviser is paid, that will be a decision for them to both make at that time, FDS’s will make sure that value remains relative to delivery. In the meantime as fellow ‘Ross’ myself – I wish Matt well he appears to have created a good business which hones in on client perceptions, although the reality is all of us sell – its just a matter of what and how – selling service and results paid for directly or via product – it will matter to some and not to others, the outcomes however will matter to both… that comes down to the advice, not how we are paid.
Matthew Ross is right, of course. I used to lecture at the old Securities Institute Financial Planning course and then did a couple of units myself just to see what was involved and was appalled at the content – sales orientated and shallow on core issues of competence in favour of broadly financial services industry-accepted (but wrong) ideas about how to advise. I similarly find Kaplan’s course for Professional Development to be shallow and full of (sales based) assumptions that are completely wrong for building an ethical, competent industry. Sad…
I’d put my hand up to lead a course for Mr Ross’s planned academy. Others with similar experience should perhaps follow suit. How else are we ever going to sort this industry out?