Planners’ salaries: are they worth it?

Financial planning professionals are in high demand and earning more than ever, despite theAustralian Securities and Investments Commission’s (ASIC) claims that advice standards are not up to scratch.

If you want to earn top dollars, become a senior financial planner. You might also consider moving to Sydney, where the typical wage is $100,000, according to a survey conducted byFinancial Recruitment Group(FRG) on behalf ofMoney Management.

For Sydney’s senior planners, salaries were up $5,000 on last year, an increase seen across the entire profession.

Australasian Association of AMP Advisers president andAMPfinancial planner Paul Carter says Sydney is so lucrative because it is home to large financial houses and most high-net-worth individuals.

The next highest paid senior planners are in Canberra and Perth, earning an average $95,000. Melbourne and Adelaide seniors make $90,000, while those in Brisbane can typically expect $85,000.

President of the Boutique Financial Planning Principals Group (BFPPG) Bruce Baker says: “Some financial planners are worth a lot, as they are good at what they do. There is always a place for quality planners.”

For qualified and educated planners, a starting salary of $45,000 to $60,000 is not unreasonable, Carter says. Experienced individuals can expect more if they have around 15 years in the industry and a developed skill set.

“Over time, people will be prepared to pay more. Demand is definitely still there, especially on the quality side, for which the industry is pushing hard. This will be the key to hiring in the future,” he says.

Ironically, the demand for experienced planners has grown since the Australian Consumers’ Association (ACA)/ASIC scathing report into financial planning.

But, FRG’s Peter Dawson, author of the survey, says the industry has been plagued by a combination of fallout from the ACA/ASIC report, negative sentiment in investment markets and criticism from politicians, media and industry commentators.

Recent comments from Senator John Watson, who said that the importance of financial planners in superannuation should be reduced, has only added fuel to the fire.

“This has dampened opportunities at the lower end of the financial planning market,” he says.

“Relatively inexperienced planners with a marginal profit generating client base are not in great demand.”

Financial planners who have not completed the Diploma of Financial Planning (DFP) earn the lowest salaries in the industry. But among them, Sydney has the highest paid. They earn an average $65,000, with packages ranging between $55,000 to $75,000, according to FRG.

The survey found the average salary for these planners was up $5,000 from last year’s $60,000 — the same annual increase seen by planners in all locations.

The next highest paid planners in this category are Melbourne-based, taking home an average $60,000.

Brisbane, Canberra and Perth planners studying the DFP typically earn $55,000, and lowest in the pay hierarchy are Adelaide advisers, earning on average $50,000.

Individuals can expect to earn more when they become qualified. Again, most cash can be earned in Sydney. Planners there can expect to earn an average $85,000, up $5,000 from last year and ranging from $75,000 to $95,000.

TheFinancial Planning Association’s (FPA) education business unit general manager, Chris McMillan, says: “The results show that gaining the Diploma in Financial Services (Financial Planning) makes planners more marketable and provides the skills and knowledge necessary to meet consumer needs.”

Perth and Melbourne-based planners are next, typically taking home $80,000, or between $70,000 and $90,000. The former saw an annual increase of $10,000, and the latter $5,000.

Planners in Brisbane come third in the rankings, with an average salary of $75,000, or between $65,000 to $85,000. They are followed by Adelaide and Canberra-based planners, who take home $70,000.

Dawson says dealer groups are still aggressively trying to recruit quality planners and are picking over some of the large institutions that have been restructuring to gain efficiencies.

He says planners qualified to Certified Financial Planner (CFP) level, with a minimum of three years’ experience and transferable funds under administration above $40 million are in high demand. Bank planners at a senior level are also in demand to take on roles that include mentoring junior planners, Dawson says.

He says while dealer groups are not paying over the odds for planners, salary levels are negotiable for top planners, within reason.

The starting salary for self-employed advisers in AMP’s dealer group is $20,000, plus an allowance. Carter says the best route to career development is to become part of a larger practice and undergo mentoring.

So, are financial planners worth the money?

Baker says there is a breadth of abilities.

“Many work hard for their clients if they are conscientious, but I’m sure that others don’t.”

Carter says time spent with clients has increased over the past 18 months. Two hours is taken for the fact find and a further five to seven hours to develop a plan. “You then meet with the client, present the plan, decide whether it will be implemented, and provide an ongoing service,” he says.

In comparison to other professions, such as accountants, Carter says planners have more involved client work and greater obligations over compliance.

“Accountants have a discussion with the client and may give advice. With us, there are a lot of hurdles to go over before you give advice,” he says.

Baker says the industry is still growing, and at some stage, it will begin to mature. Developments in the industry and increased experience can only bring with them greater demand and higher salaries.