Two-year adviser shortage predicted

Incoming adviser education reforms are leading to a shortage of candidates in the industry.

12-Jan-2017

By Daniel Paperny

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A scarcity of professionally qualified advisers would be a persistent problem facing the advice sector until the new professional educational standards took effect in 2019, according to a leading financial services industry recruiter.

Speaking to financialobserver, Hays business director for banking Carl Piesse said years of poor regulatory oversight in the wealth management sector coupled with changing qualification requirements had resulted in a short supply of advisers with an advanced diploma of financial planning or certified financial planner (CFP) qualifications.

“Given the requirement to be a practising adviser historically has only ever been the DFP [diploma of financial planning], many experienced advisers … aren’t now prepared to do a three-year degree or complete their CFP after [spending] 20 or more years in the industry,” Piesse said.

“That skill shortage is also being compounded with the number of remediation projects that are pulling financial planners out of traditional roles.”

According to Piesse, the increase in minimum qualification requirements across the board should be regarded as a positive step towards solidifying advice professionalism in the long term as it would ensure a more lengthy process for becoming a qualified practising adviser and a higher entry requirement.

“With that said, up until these standards are in place [on 1 January 2019], we expect to see a continued shortage of experienced candidates with their CFP or a relevant degree,” he added.

While the transition to a new professional standards regime presents challenges to industry participants, the content of the curriculum itself will also need to evolve to incorporate education surrounding technological developments in advice.

A global report published by the Financial Planning Standards Board in October 2016 argued the financial planning profession must be more accountable in ensuring its certification requirements were up to speed with the latest developments in automated advice.

“A number of CFP professionals mentioned the ability to attract young financial planners to the profession as a positive outcome of the growing fintech space,” the report said.

“[Advisers] are talking about fintech more as a complement to their businesses [allowing] financial planners to devote more time to activities that bring added value to clients.”

Piesse supported the report’s recommendation of expanding content in the CFP certification education program to deepen advisers’ familiarity with automated advice and behavioural finance.

“I think the industry is changing and I think it’s important that prospective financial planners are being given the tools and being educated on what the changes are,” he said.

“I think the way advice is being delivered today is going to be different in five years and that education piece needs to start now.”

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