The financial planning industry needs to look more deeply into the development of structured graduate recruitment programs to ensure sustainable new talent enters the industry as it drives towards a profession.
This is one of the clear messages to be taken from a major new report on the structure of businesses in Australia’s financial planning industry today.
“It appears there is growing interest in, and recognition of, the role that new entrants play in the financial planning human capital market,” Associate Professor Mark Brimble, Griffith Business School, said.
“While there are some differences between the intentions and structures of small and large firms, overall the results suggest this will become a more important part of financial planning in the future. This is likely to also be driven by changing standards across the sector.”
The research findings have been delivered through The Business of Advice website, following 15 months of collaboration and data analysis. More than 100 members have accessed the report to date and provided useful feedback.
“Businesses are stating that it has helped with understanding what they are competing against when recruiting new staff,” Ric Zanetti, Principal of ZRC, said.
“The report also provides businesses with independent valid data that can be referenced in existing staff reviews and it enhances their business planning process on staff structures, remuneration levels and potential acquisitions.”
Of 335 businesses that participated, 218 completed the survey in full. Of these, 46.4% had turnover greater than $1m, 25.7% were self-licensed and the balance were licensed through 42 different Australian Financial Services Licences.
“The data we collected covered 1640 employees from client services officers through to directors,” Mr Zanetti said. “Considering the comprehensive nature of the study, we are grateful for the high level of national participation.
“It’s generating as many questions as delivering answers. This is a positive as business owners should reflect on valid data in their decision making process.”
Associate Professor Brimble, Discipline Head of Finance and Financial Planning at Griffith Business School, believes the findings provide a comprehensive look at key areas of importance for business owners including remuneration, bonus entitlements, equity participation and education and training benefits.
“There is also demand for a structured industry graduate recruitment process and for further attention to be given to skills development and general work readiness,” he said.
“We find there is a degree of consensus on the qualifications and support structures for new entrants. This is likely to evolve over time as the market for qualified and suitable new entrants heats up as new standards for advice are implemented over the next three to five years.”
Professor Brimble also indicated that given the rapidly moving financial advice industry, management of human capital is now a key driver of success for advice practices.
“With the PJC and Trowbridge findings, many businesses are re-evaluating the potential impact on gross revenue and therefore the impact on total costs. This includes staff structures and remuneration in delivering an effective client offer profitably.”
The project continues to evolve with further analysis, bespoke requests from members to benchmark their business against the market and a planned data update in 2016.