Unclear entry criteria is impacting the next generation of advisers

Speaking with ifa, Deakin University financial planning lecturer Brooke Peel explained that changing entry requirements for new advisers over recent years have deterred some advice students from entering the profession.

“I think there’s just this sort of opaqueness around financial advice and the requirements to be a financial adviser that have sort of challenged students,” Peel told ifa.

“Students, like most people, they do very much value some level of black and white clarity around the entry requirements and what they have to work towards.

“I think that, at least, speaks to why you might see students that are studying accounting and financial planning, for example, go on to work in fields other than financial advice.”

She said that although students are mostly eager to join the profession, many lack clarity about the expectations placed on them, which may ultimately lead them towards other career paths.

In addition to this, she believes difficulties faced in securing a professional year (PY) position may also be impacting the conversion rate from student to working adviser.

As the cost of operating an advice business continues to rise, many small firms are unable to justify the cost of taking on a PY adviser, leaving the responsibility of training the next generation to the larger firms.

“There’s been fairly limited opportunities that have come up. We have had some really good examples. There’s been a lot of students from Deakin especially, that have had success with gaining professional year experience, but I think as a broader cohort, that’s the challenge,” Peel said.

“It’s costly for the business to create these sorts of opportunities for students. Equally, it’s really challenging for businesses to hire externally when there aren’t these professional year opportunities being offered and students are being trained elsewhere.”

However, she explained that she has observed a strong passion among her students, not only for the technical skills involved but also for the meaningful impact they hope to make in financial advice.

“The financial advice students that I work with are really attracted to a career that allows them to apply technical skills in a really meaningful way. I think that’s a generational thing we’re seeing with some of the younger students or the first years,” Peel said.

“They’re attracted to careers that have an impact on society more broadly, and they want to be the expert in the field, but they want to apply that and help other people.”

She added: “I think, if there was a key takeaway there, it’s just that the students really want clarity around what is required, and the excitement and the passion is there, but we would like to see very clear and very consistent entry requirements.”