What’s the best way to start out in financial advice?

Speaking on the most recent episode of the Financial Planning Association’s (FPA) Future Financial Planner Podcast, host Azaria Bell and Mitchell Harrison, a financial adviser at LBW Business + Wealth Advisors, discussed the different pathways prospective new advisers can take when entering the industry. 

Mr Harrison, who started out in a paraplanning role, explained that when he started out, he wasn’t even sure what a paraplanner was.

“I just wanted like a financial adviser position because I just thought that’s the end goal,” he said.

“Even after starting that paraplanning role, I remember being like, ‘I don’t know what this role is, but it’s a foot in the door. It’s a good place to start.’ And then obviously, I had to figure out what that was and I got a bit of experience in that role.”

Paraplanning to begin his career, Mr Harrison said, gave him a solid base knowledge of the technical side of the profession.

“One of the great things for me about paraplanning was that that’s really how I built my technical analysis of what was happening and strategies,” he said.

Ms Bell, who went straight into an associate adviser role to kick-off her career, said that while she was able to build rapport with clients, there were technical elements she wished she had learnt sooner.

“Even having been in the industry for two years in my role, I didn’t know how to fill out an application form for a superfund. I didn’t know how the SOAs actually came to be an SOA,” she said.

“If I had had that background knowledge, it would have made my role make way more sense … if I had gone straight into the financial planner role, I would have been the worst financial planner in the world.

“I think starting out with those real basic things, even if they are boring — like scanning documents, filling out application forms — it makes you a more capable adviser, because one day, if you go out and start your own business as a financial planner, you're going to be the one doing all of that.”

Mr Harrison added that it’s important that new entrants to the profession don’t overlook the basics.

“I think a lot of the time we're so focused on the end goal of being an adviser that we overlook the steps,” he said.

The second half of 2022 through to the beginning of 2023 has seen a dramatic improvement in the number of new entrants to the industry.

Wealth Data reported that between 1 July 2022 and 17 February 2023, there have been 233 new entrants on the Financial Advisers Register (FAR). Over the same period, there was a net loss of 324 advisers, which effectively means that there would have been a net loss, excluding new entrants, of 557, almost exclusively experienced advisers.