Speaking at an event in Sydney last week, Kaplan Professional chief executive Brian Knight said more needs to be done to make the financial advice profession more accessible to university students.
Working with Delta Consulting at the University of California, Berkeley, Kaplan conducted research aimed to understand the perceptions of financial advice as a career and profession across different age groups.
To conduct the research, they surveyed 750 people from across a wide variety of stakeholders, including existing advisers, new entrants, licensees, and consumers.
Sharing the concerns voiced in the research, Knight said high education standards, career path uncertainty, and the perceived industry culture are veering potential talent away from the advice profession.
“What new entrants are saying is it’s hard to break into the industry due to its strict qualification requirements, few positions available to the younger generation, and first year training costs,” Knight said.
“It was seen as far too narrow, too many hurdles, uncertainty about the professional year, and what support they would get.
“Younger generations in the industry feel it is dominated by dated cultures and norms, and the male-skewed industry is a deterrent to women.”
Through the research, Knight said three main challenges became apparent for the industry, including attracting new entrants to the profession, upskilling them as quickly as possible, and helping advisers better service all generations of clients.
“New entrants in that generation coming into uni are looking for work-life balance, so we’re trying to promote this as what the career is. What was important to them was having careers that gave them a sense of fulfilment in which they felt they were making a meaningful contribution and had a positive culture,” Knight said.
“They also needed clear guidance on the entry pathways to a career and support to navigate the barriers of entry such as education requirements, work placements, and the professional year.
“They’re not seeing a career path. That’s why we’re losing them. There’s not a clear pathway that people say, ‘This is how I want to become a financial planner, this is how I do it’, and that came out loud and clear.”
Noting the challenge of upskilling new entrants, Knight said on top of learning client engagement skills, communication, and interpersonal skills, students also wanted more practical learning.
“They said there’s a lack of practical and hands-on learning for new entrants to the profession that could be addressed through workshops, seminars, and work functions,” Knight said.
“They were open in saying, you go to university to do financial planning, generally, you still get your notes and the tutorial fundamentally, but we can jazz it up in a few ways.
“They’re saying, ‘We want more than that’, the younger generation. ‘We want to have practical learning from the start.’ And so this has become an issue for us to take on. How do we actually start to change the way we train new entrants?”
According to the research, new entrants expressed a desire for increased education aimed at improving their ability to cater to a variety of client needs.
Knight said this included “help navigating new and evolving investment opportunities such as ETFs, private equity and high yield savings accounts”.
“Behavioural finance training, to help advisers better service all their clients, particularly to help new and younger advisers better understand the older generation,” he said.
“And on the other hand, the professional communication preferences of the younger generation to help advisers reach, engage and communicate with Millennials.”
Concluding, Knight said, “We need to start building a career path. We need to build a talent pipeline. We need to take it on all across the industry.”
Also speaking at the event, Sarah Abood, chief executive of the Financial Advice Association Australia (FAAA), said that the FAAA and Kaplan Professional are working on an Advice Academy to address the shortfall of financial advisers in Australia.
“We believe that what we need to do is support the professional year in a consistent and standard way,” Abood said.
“I hasten to add that lots of people are doing a lot in many different ways to try to support people and candidates and we absolutely don’t want to replace that. What we want to do is create a central structured program that the whole profession can benefit from.”
“New entrants in that generation coming into uni are looking for work-life balance”. Lol..give FP a very wide berth if that is one of your objectives.
200,000 plus students studying Accounting, Finance, Economics Courses…. versus a handful of rich metropolitan Universities offering specialist Financial Planning Courses.
How many 18-year-olds leave school and say they want to do something Finance related and so study a Bachelor of Commerce. A few years on, that 23-year-old Degree qualified student, after studying 3 years, now with a huge HELP debt, and even financially behind their mate that went to Tafe and become a Tradie is then faced with decision to become a Financial Planner…..but the Goverment with the help of the FAAA, we tell then they studied the wrong degree.. and we wonder why entrants numbers are down.
We wonder why there is not enough female advisers.
Perhaps the FAAA should look at their original recommendations that for the above University graduates you’ll need the equivalent of a Masters Degree to gain entrance.
I firmly believe that degrees of any nature should actually teach useable skills – not just teach theory that isn’t useable in the real world of a particular profession. If one wishes to remain an academic, allow them to continue down the theoretical path. Though if one wishes to have an actual profession, don’t waste their time or money and instead teach them how to do a job.
As a dedicated academic in the field of Financial Planning (FP), I am in favor of the following:
1) Embracing a pedagogical approach that prioritizes practical application from the outset, supported by FP theory wherever applicable. This is a principle I have tried to champion at CQUniversity despite the constraints imposed by the current educational standards, which I find to be limiting.
2) Implementing a cohesive, structured program accessible to the entire profession, found in the practices seen in other fields, like accounting, law and medicine. Such a program would ensure that students are equipped with essential FP skills within a more streamlined curriculum, a necessity that seems lacking from my perspective.
The input and collaboration of the Financial Adviser community are paramount in shaping the FP curriculum to meet contemporary demands of the financial advisory sector. In my assessment, the existing accredited university curriculum falls short in the above two points.
I firmly believe that FP academics should uphold the standards set by TEQSA for FP degrees, while concurrently engaging the Adviser community and relevant professional bodies such as FAAA (Financial Advice Association of Australia) to actively take part in refining the curriculum’s structure and content.
Sounds 100% smart and logical.
Thus can guarantee it won’t happen.
Canberra doesNOT listen to a single thing for last 22 years from Real Advisers.
Canberra Pollies, bureaucrats and vested interest like Industry Super rule the law. And they have zero interest in the real world of Advice.
Re your comment about upholding TEQSA for FP degrees. We don’t have the luxury in numbers of students to make a specialist Financial Planning Degree a minimum. In the same way Treasury is wanting to cull Advisers now, that thinking is now acting as a tool to cull entrants.
The Government is reducing Advisers numbers at all ends of the spectrum.
Let’s get those 200,000 graduates with Commerce Degrees into our offices today working as admin and paraplanners or trainee planners NOW and they can do an easy specialist Grad Dip (with credits for any FPA units studied) in there sleep as they progress.
15,000 Advisers and shrinking…200,000 Accountants in Australia and growing. Accountants don’t knock back Economics or Commerce Graduates, they make it easy to get in the door.
Is the accounting profession actually growing, especially with AI coming?
Regardless as to if they’re growing we do know there are over 200,000 graduates and we shut the door on all of them. Perhaps Accountants may not be doing PAYG tax returns for Mums and Dad, but they’re certainly not an endangered species. Whilst the only certainty is that Treasury and ASIC consider you, the Advisers, to be stamped out like dirty cockroaches.