Advice students opting for other industries

Adviser Ratings’ Australian Financial Advice Landscape 2020 report surveyed academics from nine universities and found there was “a concerningly high drop-off” in the number of financial planning students who were able to complete their degree and secure employment at an advice firm.

The report found that 44 per cent of students who enrolled in an advice degree were failing to complete their studies at all, while 28 per cent graduated and went on to an unrelated career. Just 28 per cent of those who started a financial planning degree ended up working at an advice firm after graduation.

Academics reported that the main factors turning their students off a career in advice were the challenges presented by the FASEA professional year requirements, as well as a negative public perception of being an adviser following the royal commission.

The report also warned that given these trends, it was unlikely that all universities would be able to maintain their range of advice degree programs for much longer.

“Financial planning courses cost more than accounting and there are far fewer students to provide economic scale for providers,” Adviser Ratings said.

“Unless higher education providers can attract more students, they will be forced to shut down financial planning degrees, further stunting supply.”

At ifa’s Business Strategy Day in March, FASEA chief executive Stephen Glenfield shared that approved degree enrolment numbers had grown to 1,200.

The Adviser Ratings report noted that while the education standards had helped in establishing a consistent skill base for the industry, graduates were still finishing advice degrees without all the skills necessary to become a financial planner.

“FASEA’s accreditation of programs and courses has improved consistency of content taught to new entrants to the advice profession, and lifted competencies of existing advisers,” the report said.

“Ethics and professionalism for the first time is now a core component of education requirements. However, more focus is required on the development of trust and relationship skills and there are doubts if higher education providers are equipped to practically develop students’ skills in these areas.”