One financial planning academic says the flow of new talent is being undermined by efforts to delay professional standards, as others lament the industry’s limited efforts to boost the slow pipeline.
Adviser Ratings has reported extensively on the slow supply of new graduates to financial planning compared with adviser exits, with recent data showing around seven departures for every new arrival. Last week, we reported there are fewer than 200 provisional advisers listed on the Financial Advisers Register and most have ended up at large licensees in 2021.
We’ve been told students feel disheartened by some licensees’ approaches to the professional year, with some feeling that licensees want to churn them through the 12 months without investing in their development.
It’s also feared industry advocates slowing and watering down professional standards has affected the morale of students, who see the industry moving further away from professionalisation.
Associate Professor Sharon Taylor, of Western Sydney University, said changes to the professional timeline – such as moving the exam deadline – have affected student supply.
“Our concern at the moment is because the government has continually extended the deadline, we’re getting a slow pipeline,” she said. “FASEA tried to do as much as it could, but it’s been thwarted.”
Professor of Finance Kathy Walsh, from the University of Technology Sydney, said the lag in structural changes in the industry may be affecting the desire to study financial planning.
“I think supply is growing, but I wouldn’t say it’s a healthy supply,” she said.
Few professional opportunities for students
Professor Walsh said more needs to be done at an industry level to find development opportunities and placements for students.
“One of the major barriers for students is the banks moving out of financial planning [which leaves fewer roles for graduates],” she said. “Who is making the investment in these students now?”
Professor Walsh and Associate Professor Taylor agreed planning students are facing a number of challenges in finding professional year spots.
“We’re finding the industry won’t take on anybody who is not fully qualified,” Associate Professor Taylor said. This is despite students in their final year of a FASEA-approved degree being allowed to begin their professional year.
She questioned whether universities could continue to support financial planning students.
“If there’s no quantifiable flow of students by the time these extensions end, you won’t have universities offering the courses,” she said.
Marc Olynyk, program director of financial planning at Deakin University, said while Deakin’s enrolment numbers have been growing, student demand is difficult to determine due to the need to complete the FASEA exam, COVID-19 and the related fatigue and ongoing regulatory changes.
“The profession still needs to do a lot more to promote financial planning as a career of choice and the significant opportunities that already exist but will continue to grow over the next few years as the professional year program is progressively bedded down,” he said.