‘We need to build a talent pipeline’: Reaching the next gen of advisers

Speaking at an event in Sydney last week, Kaplan Professional chief executive Brian Knight said more needs to be done to make the financial advice profession more accessible to university students.

Working with Delta Consulting at the University of California, Berkeley, Kaplan conducted research aimed to understand the perceptions of financial advice as a career and profession across different age groups.

To conduct the research, they surveyed 750 people from across a wide variety of stakeholders, including existing advisers, new entrants, licensees, and consumers.

Sharing the concerns voiced in the research, Knight said high education standards, career path uncertainty, and the perceived industry culture are veering potential talent away from the advice profession.

“What new entrants are saying is it’s hard to break into the industry due to its strict qualification requirements, few positions available to the younger generation, and first year training costs,” Knight said.

“It was seen as far too narrow, too many hurdles, uncertainty about the professional year, and what support they would get.

“Younger generations in the industry feel it is dominated by dated cultures and norms, and the male-skewed industry is a deterrent to women.”

Through the research, Knight said three main challenges became apparent for the industry, including attracting new entrants to the profession, upskilling them as quickly as possible, and helping advisers better service all generations of clients.

“New entrants in that generation coming into uni are looking for work-life balance, so we’re trying to promote this as what the career is. What was important to them was having careers that gave them a sense of fulfilment in which they felt they were making a meaningful contribution and had a positive culture,” Knight said.

“They also needed clear guidance on the entry pathways to a career and support to navigate the barriers of entry such as education requirements, work placements, and the professional year.

“They’re not seeing a career path. That’s why we’re losing them. There’s not a clear pathway that people say, ‘This is how I want to become a financial planner, this is how I do it’, and that came out loud and clear.”

Noting the challenge of upskilling new entrants, Knight said on top of learning client engagement skills, communication, and interpersonal skills, students also wanted more practical learning.

“They said there’s a lack of practical and hands-on learning for new entrants to the profession that could be addressed through workshops, seminars, and work functions,” Knight said.

“They were open in saying, you go to university to do financial planning, generally, you still get your notes and the tutorial fundamentally, but we can jazz it up in a few ways.

“They’re saying, ‘We want more than that’, the younger generation. ‘We want to have practical learning from the start.’ And so this has become an issue for us to take on. How do we actually start to change the way we train new entrants?”

According to the research, new entrants expressed a desire for increased education aimed at improving their ability to cater to a variety of client needs.

Knight said this included “help navigating new and evolving investment opportunities such as ETFs, private equity and high yield savings accounts”.

“Behavioural finance training, to help advisers better service all their clients, particularly to help new and younger advisers better understand the older generation,” he said.

“And on the other hand, the professional communication preferences of the younger generation to help advisers reach, engage and communicate with Millennials.”

Concluding, Knight said, “We need to start building a career path. We need to build a talent pipeline. We need to take it on all across the industry.”

Also speaking at the event, Sarah Abood, chief executive of the Financial Advice Association Australia (FAAA), said that the FAAA and Kaplan Professional are working on an Advice Academy to address the shortfall of financial advisers in Australia.

“We believe that what we need to do is support the professional year in a consistent and standard way,” Abood said.

“I hasten to add that lots of people are doing a lot in many different ways to try to support people and candidates and we absolutely don’t want to replace that. What we want to do is create a central structured program that the whole profession can benefit from.”