With recent discoveries from the Royal Commission and education reforms introduced by FASEA (Financial Adviser Standards and Ethics Authority), the financial services industry is currently going through a period of volatility with not much certainty in sight.
But what of the unpredictability? For now, there are only projections of what the future might look like.
For the optimists, this is a period of metamorphosis. A period that has the potential to give rise to a new era of well-educated advisers who know compliancy like the back of their hands.
For the pessimists, it’s just the beginning of the decline. A period of job loss and uncertainty that is sure to deter any up and coming hopefuls.
Regardless of your outlook, the industry is going to change.
FASEA has set a timeline of 2024 for all practicing financial advisers to obtain a relevant university qualification. This means that advisers who are not able to produce a degree in financial planning by 2024 will need to start wrapping up long standing professional relationships and bid farewell to an industry that, many have argued, needed the current shake up years ago.
Nevertheless, there are some who see the current changes as a time of opportunity. Andrew Bourne, who works with financial advisers to create more efficient processes using Xplan and a former trainee junior financial adviser and adviser assistant himself, sees opportunity and long careers for those willing to shift their thinking about traditional career trajectories.
Traditionally, young advisers have come into an industry pushed forward by vertical growth and those willing to face the limits of their ambition and ethical elasticity were most likely to be rewarded with opportunity.
This, according to Bourne, will not be the case in the future.
“There’s a massive opportunity for young advisers to establish themselves and put their stake in the ground on what advice is going to look like in the new professional world, away from product-based advising to relationship managing.”
However, Bourne is also quick to point out that while younger advisers may have more opportunities to be the face of financial services, older advisers still have an integral role to play in industry changes.
“I see a lot of older advisers taking on a business advisory type role. The soft skills that older advisers have got is still going to be really important,” he said.
Paul Cullen, Advice Solutions Executive at Centrepoint Alliance, feels similarly.
Cullen suggests that once findings from the Royal Commission are finalised, “[then] there’s not the same environment where those reputational problems can occur again.”
However, he does see potential issues with young people not having enough perspective to see where the industry may go in three to four years and opting towards accounting or law rather than seeing the potential of financial advice as a career.
Young advisers like Janith Perumathanthri who works as an Assistant Planner at the RFE group, are ready to weather the storm though.
Perumathanthri sees the industry shifting towards being more strategy focused and this is where he sees his future opportunities coming from.
“Young advisers are going to focus on the strategy when thinking about how to help their clients. Products are going to be secondary,” he said.
Perumathanthri also sees boutique firms flourishing with older advisers taking on roles in portfolio management and business development and contributing their knowledge of product while younger advisers focus on strategy.
As the changing of the guard takes place, it’s evident that those in the industry like Bourne and Perumathanthri are still keen to have some direction from the more experienced.
After all, as Bourne points out, young advisers may have the skills to turn financial advice into a profession, but soft skills and relationship management remain will always remain at the core of the industry.