Recruiting Talent for Australia’s Financial Advice Industry
Recruiting Talent for Australia's Financial Advice Industry has become tricky as firms struggle to meet the growing demand for advisers.
In 2021, employment in the financial services industry peaked at 490 500 employees and is predicted to increase to 518 800 by 2025 (Victoria University 2023). However, despite this growth in the industry, newcomers to the financial advice industry are on the decline. Various factors such as regulations, demographic shifts and the increasing demand for advice have contributed to a recruitment gap.
The increasing demand for new talent and advice has created a problem for practices as they are being forced to turn away clients as they cannot keep up with the demand for their services. As the aging population and increased number of SMSF members has surged, this has created a high demand for advice and guidance in retirement. This rising demand has out-paced the growth of new advisers entering the market and the talent which is currently available as employment growth has fallen by 4.8% in the last 5 years. This has created pressure on firms and recruiters to find suitable talent.
Quality of Advice
However, the introduction of the Qualified Adviser Review (QAR) presents an opportunity to expand the accessibility of financial advice to more Australians. The regulatory changes imposed by the FSRC has had huge repercussion on advisers since their report was published in 2019. However it is the hope that QAR will allow a broader range of professionals to offer advice (with the changes to SoA requirements) which will in turn, drive supply upward. These new regulations in place will help the market soon return to equilibrium as revenue is projected to increase at an annualised 2.5% over the next 5 years.
This just leaves the gap to be closed between the need for new and fresh talent in the industry and the lack thereof. The lack of enrollments and applications to join the financial advice sector highlights the need for education and professional development. Efforts should be made to attract young people to the industry such as offering targeted programs and incentives for students to pursue this career. Internship programs and mentorship initiatives can also play a vital role in attracting and nurturing young talent. As a business student myself and one not studying financial planning, I can attest to the lack of attention and exposure the financial planning industry gives to future business students. However, there are significant attempts within universities to recruit students to Financial Planning, and change their major. It is up to the industry and educational institutions to begin to prioritise the exposure of financial planning as an attractive future prospect to future students.