Expensive and complicated: Reform needed to attract more international advisers

Adviser numbers have declined for years and although they have stabilised at some 15,000, the shortage is evident with a lack of new graduates entering the profession. This has sparked discussions on boosting adviser numbers, with attracting talent from overseas frequently suggested as a way to fill the gap.

“Advisers who migrate to Australia bring years of practical experience in client engagement, investment strategy, navigating market turmoil and empathetic communication,” Fradley Advice’s Nathan Fradley told ifa.

He highlighted that skilled migration will be vital to replace the steady stream of retiring advisers, with half of the current cohort expected to exit the workforce in the next 15 years.

For Dan Nel, a South African-born adviser at Tribeca Financial, Australia has all the right ingredients to be an attractive market.

“Australia has a strong economy, a strong middle class, a well-established and regulated financial services industry,” he told ifa, also emphasising the lifestyle offered by living here.

However, the journey for Nel to become an adviser in Australia was long, expensive and involved a degree of personal sacrifice. Though Nel endured this process, he understands why it could be too much for many to tolerate.

“It’s a massively long process. So that’s a big hurdle for anyone wanting to come over,” he said.

“And that’s not even considering the thousands and thousands of dollars it took to come over here to be a financial adviser,” Nel said, adding that these costs limit the pool of potential migrant advisers to those from higher socioeconomic countries.

“When I explain the process to overseas advisers, they say, ‘That’s a bit too much money.’ They have to study, which is going to cost them $3,5000 plus $3,800 per module. And they’re going to have to do at least four or eight [modules].”

Another adviser who sees the cost and regulatory obstacles as a deterrent to skilled migration is Pedro Marin, managing director at Marin Wealth.

Having emigrated from Venezuela as an international student, Marin explained the already limited pathways graduates are offered into a career in financial advice are even more challenging for overseas students.

“So few universities are providing a clear pathway towards our profession and that really is a struggle,” Marin said, an issue compounded by the fact there is no pathway to residency through financial planning.

This means many skilled overseas graduates are taking their knowledge and deep understanding of the Australian financial system home – a path Marin himself considered.

For Marin, targeting international students as potential future advisers is the easiest way to address the advice gap. However, he shared that the few universities that do offer financial planning as a degree do not integrate them in their residency pathways.

“That’s why our recruiting comes usually from accounting because accountancy gives you a residency path,” Marin stated, another issue itself as it forces advice firms to compete for graduates with accountants.

For advisers, such as Nel, who are already qualified professionals, better recognition of their skills is needed.

While both he and Marin acknowledged the need to address knowledge gaps, Nel emphasised that greater coordination among local and overseas adviser bodies and recognition of foreign qualifications could make the transition much easier.

Nel also suggested governments, both state and federal, need to take more interest in attracting overseas advisers to the domestic workforce.

“The government needs to actually sponsor skilled financial advisers with qualifications to come and get an opportunity to first get to Australia and look for a job,” he said.

“I found that when you approach an employer, they don’t know if you, when you get here, are able to do the job right. So, it’s a big risk for them financially.”