Talent shortage to inhibit advice firms

Forte Asset Solutions director Steve Prendeville has proposed the inclusion of an introduction to financial planning in both accounting and commerce degrees to help attract new talent to the industry.

“We have a skills shortage,” Mr Prendeville said in his 2021 market commentary.

According to Mr Prendeville, introducing accountants to financial planning within the duration of their degree would help “the best and brightest” recognise the opportunities in advice.

Awareness, he said, would also be raised if financial literacy featured more heavily in secondary education.

While a talent shortage has pervaded almost every industry across the country, Mr Prendeville explained that the exit of banks from the advice space has further aggravated the issue in advice.

“The banks or institutions had been the incubators for the advice industry as they paid and educated advisers very well. With the retraction of the banks, we no longer have the talent funnel we once had,” he highlighted.

Touching on the substantial exodus of financial advisers since 2018, Mr Prendeville said that while the industry has been depleted, it would appear that “the quality of the remaining profession has significantly improved”.

In fact, according to ARdata, the new face of advice looks markedly different to that of its predecessor, with the remaining 18,901 registered advisers better educated, more qualified and more likely to “behave in ways associated with quality advice” than those that have left the industry.

ARdata’s scores suggest that 14.8 per cent of current advisers are ‘exceptional’ while only 3 per cent of the advisers that have left the industry received the same rating. Moreover, ARdata rated 26.9 per cent of remaining advisers as ‘very good’ compared to only 11.1 per cent of ceased advisers.

However, while acknowledging that the last three years have been “very painful”, Mr Prendeville said they also represent “the start of a new and exciting chapter with great opportunity, but only if we are ready for it”.