Industry insights on skills needs
According to the Financial Services IRC’s 2019 Skills Forecast, financial planning and advice is expected to grow through increased demand from older Australians seeking financial advice in their retirement. Demographic changes will shape the financial planning and advice sector by:
- Increasing demand for financial advice from superannuates, as growing post-retirement wealth creates a greater incentive to seek professional financial advice. The ability to assist clients through the potential emotional and psychological stress of retirement will be crucial.
- Responding to advice in product growth areas such as ethical investments and property. Demand for ethical and responsible investments has more than quadrupled over the past three years, with 92% of Australians expecting their superannuation or other investments to be invested responsibly and ethically. The strong demand for property is driving demand for mortgage brokers and general insurers, in addition to financial advisers.
The Chartered Accountants Australia and New Zealand (CA ANZ) report The Future of Advice: Overcoming Challenges to Deliver Great Consumer Outcomes, argues that in a world of rapid demographic, technology and regulatory change, the future is positive for financial advisers. Expert advice is the cornerstone of effective decision-making. Given the impacts of an ageing population, retirement savings, and ongoing concerns around financial literacy, now more than ever everyday Australians need access to affordable, quality advice.
Key findings of the report include:
- There will be an increasing number of older and wealthier people seeking financial advice in the future.
- Technology will play a major role in advice, but many people still want face-to-face contact and a trusted adviser.
- People want increasingly personalised advice that is more transparent. Advice in this form is more likely to increase trust in the adviser as well as lead to good consumer outcomes.
The authors of the article Ethics in Financial Planning: Analysis of Ombudsman Decisions Using Codes of Ethics and Fiduciary Duty Standards, analysed 212 financial ombudsman decisions (2013–2018) to understand the nature of financial planning misconduct in complaint decisions. Diligence, acting in the client's best interest and having no reasonable basis for advice are interconnected elements in over half of these decisions. Secondary elements are misleading statements, conflicts of interest and disclosure. Analysis of decisions involving fiduciary duty showed that financial planners failed to ascertain a client's circumstances and did not form advice based on their client's information. The authors argue that as financial planning professionalises, financial planning education, policy and practice should address these issues.
The objective of the Australian Financial Markets Association’s Framework for Industry Conduct Training is to assist participants in Australia's wholesale banking and financial markets to enhance the professionalism of staff through designing and implementing effective conduct employee training programs. Conduct training is training in ethics and compliance-related topics that is designed to minimise the risk for an organisation of becoming involved in practices that contravene laws, industry standards and organisational values. Hence, the purpose of conduct training is to influence and guide the behaviour of staff.
Gender inequality and occupational segregation in Australian financial services present a stark disparity, with men working as financial planners and women being over-represented in lower-paid administrative positions, according to the authors of Occupational Boundaries: Gender Capital and Career Progression in the Financial Planning Industry. The article uses a gender capital theoretical framework to examine gender segregation between financial planning and paraplanning occupations. Analysis of interviews with 26 financial professionals suggested that masculine capital, including confidence and persuasive soft skills, marked success as a financial planner. Feminine capital, including organisational skills, was aligned with the role of paraplanner. These findings contribute a new perspective on why gender segregation occurs in financial planning and bear relevance as financial planning professionalises.
The article The Hayne Royal Commission and Financial Planning Advice: A Review of the Impact on the Operating Model of Financial Advice Firms, examines the changes in operating models of financial planning businesses post the Hayne Royal Commission. The authors argue that the recommendations of the Royal Commission are likely to accelerate the adoption of digital operating models including robo-advice and digital delivery to mass customers. A digital advice operating model will enable advisers to meet compliance and regulatory obligations more easily, to reach new and more diverse customers living in different geographical locations faster, and to significantly reduce the operating cost of advice provision.
The National Skills Commission’s Skills Priority List: June 2021, lists the occupations of Financial Investment Adviser, Financial Investment Manager and Finance Manager as having ‘Strong’ future demand and Financial Market Dealer and Finance Broker as having ‘Moderate’ future demand. Research has not identified any significant difficulty filling vacancies for these occupations across Australia, except in New South Wales where there is a shortage of Financial Investment Managers and Finance Brokers.
