How QAR could change Financial Planning Industry recruitment
What does QAR mean for Financial Advice Industry Recruitment?
The potential impacts for recruitment in the Financial Advice Industry are huge if two key recommendations of the QAR are implemented. Here are our insights gained and opinion from the SMSF National Conference #NC2023.
In short QAR will resolve the recruitment squeeze being felt by the Financial Advice Industry and in the medium term return the market to equilibrium.
Quality of Advice Review – Panel Discussion
Fascinating at the #SMSF23 Conference listening to Michelle Levy , Sarah Abood, Paul Barrett, John Maroney & Tahn Sharpe. Michelle Levy, Author of the Quality of Advice Review (QAR) presented to Parliament on her journey consulting to industry locally and internationally, disseminating a vast array of opinions facts and figures on how industry can best serve Australians with affordable accessible financial advice.
Paul Barrett offered hands on experience from the coalface of advice practices on why the current system is flawed with investment risk and costs too high. Going on to suggest the QAR recommendations will increase investment confidence attractive to both local and international participants, plus a potential and immediate 20% profit uplift across the board for advice practices.
Key takeaways:
- Allowing product providers and institutions including banks to provide advice will open the market to advice for more Australians. This recommendation alone will drive supply and also increase the investment attractiveness for local and overseas companies.
- Removing the ‘tick a box’ legislative heavy SOA requirement will have several huge impacts. Firstly advice clients will not have to be presented with a very confusing document purely to satisfy obtuse regulatory requirements. A WIN for consumers. Secondly, Advisers will gain back a huge amount of time and cost absorbed by this arduous administrative requirement. A WIN for Advisers.
What does this mean for Recruitment?
If these two QAR recommendations are adopted the result will be massive.
Allowing product providers and institutions to provide advice to clients will create a massive number of new jobs in the Financial Advice Industry.
Demand will initially outstrip supply with the establishment of new advice divisions, and there will be a recruitment squeeze at the lower end of the market around Adviser/Client services, and additional resources required in technical services and mid level (Adviser) management. This initial impact will have a short term negative impact on recruitment as businesses compete for talent, and to retain existing talent.
Medium term the impact will be positive and override this short term pain. In the current environment there are limited institutions training industry entrants on mass, previously provided primarily by the banks. Supply has effectively been interrupted for the past 4-5 years leaving a massive whole in the market with limited new entrants flowing into the industry.
With the return of institutions new entrants will again be provided a pathway into the industry and a career in Financial Advice. Historically entrants have commenced in client services, progressing through Adviser services into paraplanning or technical roles, and then into Associate Advice and full Financial Advice roles. Left to private Financial Advice Practices and the limited number of current institutional participants supply has dropped significantly and squeezed the recruitment market, with particular note to administration/client services roles.
In summary, if these two key recommendations highlighted above from the QAR are implemented, the future supply of industry entrants critically missing in the current market will return. Importantly this supply will provide the Financial Advisers of the future and underpin the next 20 years of Financial Advice in Australia.
Footnote:
Having been involved in Financial planning recruitment for 25 years in Australia I can testify the industry as a whole and associated superannuation, investment funds and insurance services could not have grown so rapidly without the banks participation. Resulting in more advice for more Australians.
The Royal Commission played a vital role in restructuring and realigning the industry to consumer needs whilst improving overall education levels. This implemented ‘common sense’ injection to the industry meant 1 step back in growth, QAR will potentially provide 2 giant steps forward.
Comments or Questions:
Please email Dugald Braithwaite or Call
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