Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.
Through growth and change we’re seeing in the profession, planners have a major opportunity to advance in their career and professional standing.
For some time now, the financial planning profession has been under pressure from widespread change. Fresh demands on the resources of businesses, both large and small, are coming from major shifts in demographics, legislation, education requirements and the disrupted landscape of the financial services sector as a whole.
All of this can be very unsettling for our members. But a context of change creates opportunities for our profession to progress and evolve like never before.
In rising to the challenges of new FASEA requirements and post-Royal Commission consumer sentiment, we have the chance to rebuild confidence and establish our profession as genuinely qualified to act in each client’s best interests. This is something the majority of members have always done. Going forward, ethical and client-centred conduct will be upheld in education and professional standards, which will, in time, transform the culture and reputation of our profession.
As the new year begins, perhaps with greater certainty about the future for our members, it’s important to acknowledge how far we still have to go. Transformation takes time and momentum, discipline and energy. What can keep us going when we feel depleted in these areas is vision and optimism. So, I want to acknowledge three major reasons why members can feel positive about these changes, and the career and future that lies ahead of them.
The growing demand for financial advice
Economics 101 tells us the projected supply and demand ratio is weighted heavily in favour of financial planning being a growth profession.In its 2019 research report ‘Financial Advice: What consumers really think’, ASIC found that 41 per cent of Australians intend to get financial advice in the future. RecentInvestment Trends(2018) research shows a similarly optimistic pipeline, with51 per cent of Australians reporting they have an unmet advice need.
Demand for expert financial advice from emerging generations, in particular, is extremely positive. Our own FPA ‘Gifts that Give’ 2019 national research reports that 81 per cent of Gen Z and 76 per cent of Gen Y surveyed would like to see a financial planner to create a plan to achieve their life goals and provide peace of mind that their finances are in order.
The ASIC research also confirms that more Australians are receiving advice. Previously, 20 per cent stated they had received financial advice in the past, and the new findings reveal the number has risen significantly to27 per cent (a 35 per cent increase). With more people already seeking financial advice, plus the latent demand from Australians with unmet advice needs, the potential market for our professional services is growing apace.
Education is enhancing our professional standing
We all know consumers who have received advice hold a more positive view of the financial planning profession. Data from the ASIC research now confirms this, with financial advice clients being four times more likely to say they had “a great deal” of confidence in advisers.
So, how can we, as a profession, boost confidence among unadvised Australians and steer them towards acting on their opinion that ‘financial advisers have expertise in financial matters I do not have’ – a statement 79 per cent of ASIC survey respondents agreed with?
A 2018 report from Ernst & Young, ‘How do we really build financial capability’, goes further in acknowledging just how critical professional advice is to better financial outcomes. “Expecting a consumer to acquire all of the knowledge, insight and comprehension required to manage and maintain their financial decisions, is like expecting a patient to perform surgery on themselves,” the report says.
While we can’t expect higher education standards for financial planners to instantly put us on the same professional footing as surgeons, they can confirm a truth that this statement highlights: genuine financial expertise from a qualified professional transforms people’s lives by making a meaningful positive difference to their financial wellbeing.
In adopting a more rigorous, exacting education framework for financial planners, we’re making it clear who Australians can turn to for the knowledge, capabilities and support they value.
According to interviews from the ASIC report, many people feel poorly equipped to judge the expertise of a financial planner. Going forward, taking the education threshold for financial planners to the next level can give clients confidence they are working with someone fully qualified to provide expert advice in their best interests.
Greater freedom to choose your career path
Growth and learning is an integral part of what makes a financial planner. If you want a career that offers predictability, routine, and no requirement to stretch and grow professionally and personally every year, financial planning is not for you.
Unlike many other jobs in finance, the work/life flexibility of a career in financial planning can be very appealing to those seeking to balance the demands of modern life.As a financial planner, you can work at a large financial institution, a smaller boutique firm, or even start up your own practice in a location that suits you. With all the changes we’re seeing in the profession, new business models are likely to continue emerging as our profession adapts. All this adds up to having greater freedom to manage your career on your own terms.
With the advanced education and training standards now required for financial planning, new entrants can look forward to enjoying the same standing as other professionals, such as accountants and engineers.
Once they have completed their higher education, graduates must undertake a Professional Year in order to register as a financial planner. Through the mentoring program embedded into the Professional Year, new entrants form strong relationships with mentors, receive an accelerated start to networking and building connections within the profession, and learn from experienced professionals.
In time, this new level of academic and practical preparation will provide financial planning practices of all types and sizes with high calibre, experienced recruits to enhance service quality for a greater number of clients.
A strong foundation for excellence
The big picture is that a financial planner can help guide people to achieve their own financial goals and security through personalised strategies – you get to help inspire and activate people’s dreams by creating a vision.
The high calibre of entrants to the industry is just one of the ways our profession can excel in bringing these visions to life. By setting the bar higher for excellence in service delivery, our new standards in education and ethical conduct are critical to rebuilding consumer confidence in our profession.
As trust in our capabilities and expertise grows, members are well-positioned to meet strong demand for their qualified insights and meaningful help in matters of money and life.