How to prevent young adviser exodus
In light of a recent report unearthing that three-quarters of advisers looking to depart are aged under 40, two advice professionals discuss why this may be the case.
Recent data from Deloitte and Iress’ Advice 2030: The Big Shift report discovered that 21 per cent of the 250 surveyed advisers said they were likely to switch careers or retire in the next 12 months.
Concerningly, three-quarters of those looking to depart were advisers aged under 40. Out of all under-40s surveyed, some 26 per cent said they intended to switch careers or retire in the next 12 months.
Commenting on these findings, Esencia Wealth chief executive Matthew Fenning said he believed this might be due to a lack of structured career timelines for new entrants, meaning they couldn’t envisage themselves at the business long term.
Additionally, some may be hitting a “career ceiling” where they cannot progress to the adviser milestone at their practice due to limited openings.
“A lot of time when we interview people, it’s that they’ve reached a point in their business where they’re not able to move into an advice role or they’ve hit a ceiling in terms of available opportunities,” Fenning told Money Management.
“What we think is vital is whatever ground someone walks into the business on, they will have an acute understanding of what they need to do to progress their career, right from the client service level. That means being transparent and committed as a business to invest in each other.”
Part of becoming a fully fledged profession is having clearly laid out career paths for associates and support staff to work towards as soon as they walk in the door, he added.
Graduates often start out in a paraplanning or client services role, before completing 1,600 hours of training in their professional year (PY) and the adviser exam, as an associate or provisional adviser. After completing these steps, they can then progress to the authorised adviser milestone.
While young workers looking to change careers is a common trend across all industries, it is coming at a critical time for the advice profession, noted Anne Palmer, general manager of education and professionalism at the Financial Advice Association Australia (FAAA).
“There is a general trend of younger aged workers being more likely to change careers, which isn’t limited to financial advice. For example, a survey by RMIT Online in September 2023 showed that one in four workers under the age of 30 in Australia were contemplating a career change,” she explained.
“However, this is playing out in financial advice at a time when attracting more people to the profession is crucial.”
The FAAA is currently working with key stakeholders to create a new program to support new entrants, Palmer said, in addition to initiatives such as its dedicated career centre. Moreover, the industry body encourages advice practices to continually evaluate and update their retention strategies and progression pathways for employees.
Palmer added: “Workers today also consider a broader range of factors when choosing an employer, or choosing to stay with an employer, such as the ability to work from home, culture, and the opportunity to make a difference to people’s lives.”
Promoting the positive impact that advisers can have on clients in significant ways is critical to recruiting and retaining new entrants, she said, echoing sentiment from the Deloitte report’s co-author John O’Mahony.
“Work like this [report] which highlights the financial opportunity for advisers but also the opportunity to make a difference to people’s lives is important, that’s what advisers have told us they enjoy about the job,” O’Mahony recently told Money Management.
“[They also] spoke to the opportunities associated with the intergenerational wealth transfer and were excited about catering to a younger (and more diverse customer) base. This shift presents opportunities for advisers to provide a more diverse portfolio of advice.”
Similarly, Palmer concluded: “Talking about the difference our profession makes may help to instil justified pride in the role of an adviser.”
AUTHOR
Jasmine Siljic
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You have got to be kidding right ? Currently this is a shocking profession to be in ...and the younger advisers are getting out cos they can !