Big opportunities for tomorrow’s advisers who can straddle the ‘great age divide’
Given that the forecasted eight million Australians shifting from the accumulation phase of their superannuation into draw-down phase will need greater financial guidance, and there’s a pending exodus of advisers (average age currently 57) into retirement – there’s never been a better time to contemplate a career in financial advice.
Best estimates suggest that at least fifty percent of the country’s 20,000-plus financial advisers will be heading for retirement over the next five to 10 years. This diaspora arguably creates untold opportunities for an army of young and promising newcomers.
However, those eyeballing a career in financial advice should recognise that the latest Royal Commission into the banking sector, has only added to major trust issues plaguing the sector since the Storm Financial and a litany of other advice firm scandals.
Then there’s the entry issue. Up until recently, becoming a financial adviser could (potentially) be achieved in a few months, if not weeks. However, while long in the making, new minimum entry criteria is focussed on putting financial advice on a similar footing to other university trained professionals, like lawyers and accountants.
The Financial Adviser Standards and Ethics Authority (FASEA) has announced that from 1 January 2019, new entrants into the financial adviser occupation will require an Australian Qualifications Framework (AQF) Level 7, FASEA-approved qualification, equivalent to a bachelor degree.
While currently open to consultation, FASEA is also proposing a rigorous professional development (PD) program to help advisers maintain and extend their professional capabilities, knowledge and skills. Existing advisers – many of whom have seen their income severely reduced following the wind-up of commissions – are also required to bootstrap their skill base, and this could force many to head for the retirement door a lot earlier than they anticipated.
The bottom line is the demand for advisers is expected to sky rocket by 2023, and there’s still ample time for school leavers, and career-changers to qualify in time to capitalise on unprecedented demand. However, the age gulf between tomorrow’s advisers and their clients is becoming increasingly wide.
As a result, young people entering the industry need to second-guess whether they have the necessary people-skills to be taken seriously by clients old enough to be their grandparents.