Financial planning salary survey – sales skills no longer a must have

The attributes that companies are seeking in financial planners are drastically changing, with sales no longer a must-have skill, writes Milana Pokrajac. 

For several years, even decades, it was impossible for a financial planner or an adviser to find a job in the industry without an impressive sales track record or at least great sales potential.

In 2011, Money Management examined a number of financial planner job advertisements across various recruitment websites and found more than two thirds of employers (mostly large banks) either looked for sales-driven financial advisers or named this particular skill as a must.

Even after most financial services organisations moved to a commission-free remuneration environment and introduced a fee-for-service model in the last few years, it was not unusual for job ads to keep listing sales as not just a preferable skill but an essential job requirement.

Most salaried planners working for major banking groups under a fee-for-service remuneration model still receive monthly or quarterly incentives based on the revenue they bring in.

BT Financial Group, for example, told the Parliamentary Joint Committee on Corporations and Financial Services last year that Westpac Financial Planning and St George Financial Planning advisers were subject to revenue targets and participate in a bonus scheme, while Macquarie Group stated it had a “performance-related remuneration criteria” for its employees, as well as a bonus structure.

Commonwealth Financial Planning also provides incentives to its advisers and the recent restructure of the firm’s remuneration model will see its planners being assessed on both quantitative and qualitative performance.

National Australia Bank has a similar model in place for its planners, as do most other large financial advice businesses.

But while banks and other large businesses are unlikely to stop incentivising their planners in one way or another, there has been a drastic change in what those organisations are looking for in advisers during the recruitment process.

According to Simone Mears, founding partner and director of recruitment firm Profusion, the most important thing today is customer satisfaction.

“No one is going to hire a planner these days without two key things,” Mears said.

“One is customer satisfaction and the other is a good book of clients.”

She said those two things are even more critical in today’s environment than sales performance when it comes to hiring financial planners.

“I think it’s all very well to be an effective sales person, but unless you’re going to provide high-level customer satisfaction and get high-level ratings on the internal benchmarks and customer surveys that organisations do now – and unless you have an impeccable compliance track record – you’ll be of no interest to a competitor organisation as a potential hire,” Mears said.

This change in attitude could be attributed to the introduction of the Future of Financial Advice (FOFA) reforms, which saw a massive shift in focus to education and compliance.

Furthermore, over the last few years the financial advice sector has had a chance to witness what one or two “rogue advisers” can do to the reputation of an entire organisation and industry.

Apart from the introduction of FOFA and the intention to preserve and improve the sector’s reputation, the efforts of industry bodies such as the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) to turn financial advice into a profession – and have it perceived as such in the eyes of the Australian public – might also have contributed to the change in attitude when it comes to the recruitment of financial advisers.

Attracting all types

This “customer-centric approach” has also led to greater gender and ethnic diversity in the workplace, with many financial planning firms – large and small – looking to attract more women and have a more diverse ethnic mix among its workforce in order to reflect the client base.

The 2013 Hays Recruitment’s Salary Guide highlighted foreign language skills among the essential factors in planner recruitment.

“In terms of candidate trends we have seen an increased demand for professionals with foreign language skills within financial planning and private banking,” the report said.

“Asian language skills are in particular demand to help banks compete and grow their migrant banking client base.”

The last couple of years have also seen the financial services industry’s efforts to shed the image of a “boys’ club” and attract more women, especially to financial planning.

What Amelia Constantinidis, director of AMP Horizons Academy, found surprising is the number of practices looking to provide the flexibility women usually need in terms of the work-life balance.

AMP Horizons, which provides a pathway into the industry for those wishing to become financial planners, offers a 12-month program consisting of a 10-week academic period and a nine-month placement as an AMP financial planner.

After the program, graduates have the option of starting their own business as part of AMP’s financial planning network or joining one of the existing practices willing to take them on.

“Our current average percentage of female attendees is 27 per cent which is higher than the industry average and we’d like to increase that,” Constantinidis said.

“We’ve definitely seen more interest from women wanting to join the academy,” she added.

“There are employers who are looking to provide that flexibility to females. Some of our practices – and I’ve spoken to a number of them – had a very high percentage of female planners in their businesses.”

In 2012, AMP Horizons launched its Flex Program, a flexible learning option which offers a part-time study course. The program was primarily targeted at women, though all aspiring planners were welcome, Constantinidis said.

She added that a very high proportion of attendees are women.

Other large organisations and industry bodies have also made an effort to attract more women to financial advice, especially in the last year.

BT Financial Group launched its Stella network, which aims to attract more women to the financial planning industry by way of providing workshops, events, networking opportunities and greater insight into what it’s like to work in financial planning.

This was an extension of BT’s earlier announcement in which it said it aimed to double the number of female financial advisers working for the group.

The AFA had also launched its Inspire – Connecting Women in Advice initiative, which provides a network and a “professional community” to help women support each other in reaching full potential in their careers.

Commenting on the launch of the initiative at the time, AFA chief executive Brad Fox said it wasn’t only aimed at female advisers, but also paraplanners, support staff and others who are involved in the financial advice industry.

According to the feedback Constantinidis gets, it was the introduction of FOFA and the increased focus on client outcomes which attracted women to the profession.

“We also look to dispel some of the myths that are out there, like it being a male-dominated environment, that it’s a product sales environment,” she added.

“We are constantly trying to find ways to create that understanding of what it is like to be a female working in advice or what it is like to juggle family and work in this industry.”

Young talent neglected

Most dealer groups and financial planning practices looking to recruit are seeking experienced financial advisers with a good client book and strong interpersonal skills.

However, Profusion’s Simone Mears says they’re not that easy to find. For years, recruitment experts have been warning of a skills shortage in the industry, with experienced financial planners exiting the sector due to retirement or regulatory changes, while young talent is attempting to catch up.

Latest analysis by Hays Recruitment has shown that despite many financial services organisations claiming to have invested in nurturing young talent, that hasn’t been the case.

The recruitment company is starting to notice a shortage in experienced assistant financial planners and paraplanners.

“Due to a lack of investment in the development of entry-level staff there are few candidates with experience in the industry,” said Hays’ Banking Hotspots report.

“This quarter, work flow and hiring will increase in wealth management, but candidates are required to be qualified or have at least 12-18 months industry experience,” the Hotspots report read.

Robert Walters’ 2014 Salary Survey also noticed this trend.

“We recommend that hiring managers within insurance, financial planning and paraplanning take a more flexible approach to who they’re prepared to recruit,” the report said.

To attract good junior people, Robert Walters suggested offering a transparent and linear career path.

“We’ve found that providing timelines and examples of progression attracts people more effectively than promises of a higher salary.”

Hiring activitiy set to remain high

While most recruitment activity slows down in the first and last quarter of any given year due to the holiday season, this hasn’t been the case for wealth management.

In fact, according to Hays Recruitment regional director Nick Murphy, wealth management recruitment had experienced a massive boost in the lead-up to Christmas.

Hiring activity in the sector is at its highest levels in two years, Murphy told Money Management in January.

“Increased hiring started after the election, continued growing towards Christmas and it just did not stop,” Murphy said.

“From the beginning of December to the end of January it is usually quiet, but it just seems to get busier and busier for wealth management,” he added.

Simone Mears echoed Murphy’s comments, saying her firm had definitely noticed a significant uplift in activity across its client base in the last couple of months, especially in terms of planner recruitment.

However, she saw another interesting trend emerge.

“Last year there was a lot of attention and focus on systems, process, customer experience, re-engineering and creating efficiencies in that back-engine room,” Mears said.

“That’s where a lot of the recruitment activity was, whereas in the last couple of months that has shifted now into front office planning.”

Given the recent shift from temporary, short-term contracts to more permanent staff decisions, Murphy said positivity should continue well into 2014.

Salaries steady – but hope prevails

Recruitment experts have noted employers in the financial services sector have become a lot more optimistic about what the year will bring in terms of business growth.

The longest Federal Election campaign in Australian history – which halted many plans – is now a distant memory, while the markets have performed a lot better than expected in the last 12 months.

When asked whether they were expecting to increase staff salaries and by how much, 71 per cent of employers last year said they would do so by up to 6 per cent. This year, that number stands at 93 per cent.

However, less of those will receive any significant increase, according to the 2013 Hays Salary Guide for the financial services sector.

Despite increased hiring intentions and a more optimistic economic outlook, salaries for many sectors of the Australian financial services industry will not move too far up.

This is why employers will probably place more focus on providing increased flexibility and a better work-life balance rather than offering top remuneration packages, a report by recruitment specialist firm Robert Walters says.

In terms of salary expectations, however, an interesting trend can be seen in the accounting profession.

Lloyd Morgan has conducted a national survey of accountants, which revealed the salary expectations of female practitioners have increased significantly over the past year, while those of their male counterparts have dropped.

Men are prepared to change jobs for a lower average salary increase than the rise they expected a year ago (from $14,474 down to $12,898), while women expected a 36 per cent increase on their current salary (from $8,952 up to $12,167).

Lloyd Morgan executive general manager Paul Barbaro says this trend is a result of the industry working hard to attract women and to correct what has been an historical imbalance in gender remuneration.

“To some extent these findings are consistent with other sectors where women want more money than their male counterparts,” he said.

“The data reflects the focus of women on lifestyle conditions, such as maternity leave and flexible working arrangements, particularly after child birth, and it often takes a bigger salary incentive for them to consider moving between companies.”

City breakdown

There was a fair bit of consolidation among large Melbourne-based wealth management organisations in 2013, while two of the ‘Big Four’ banks engaged in major restructuring, resulting in redundancies and a level of uncertainty for their workforce.

However, the turbulence appears to have disappeared, with Robert Walters predicting a more stable hiring environment in 2014.

“Banks, superannuation firms and wealth managers will be hiring to fill newly-created roles and are focusing on retail and high-net-worth clients,” the Salary Survey said.

Phone-based and administrative staff with knowledge in superannuation, self-managed super funds and financial planning will be in great demand.

Increased focus on customer engagement has seen Sydney-based financial services organisations ramp up hiring activity in the superannuation, insurance and wealth management sectors, as well as retail and business banking.

According to Robert Walters, the same themes are expected to continue over the next 12 months, with excellent “soft skills” among recent graduates seen as essential.

There has been increased activity in the financial planning and insurance sectors, with qualified planners and claims assessors being continually in demand and moving between organisations.

Last year’s Federal Election had a huge impact on confidence among Adelaide-based banking and financial services companies, with economic conditions likely to pick up in 2014, according to Robert Walters’ Salary Survey.

Banks will be looking to grow business, resulting in a huge demand for front office staff. On the flip-side, those looking for experienced financial planners with a good book of contacts will realise they are still very scarce and difficult to source.

Furthermore, there will be no sizeable boost in salaries this year, which means companies might start offering better life-work balance to retain and attract staff.