Guest Comment: How to get started in financial planning
The pathways into a career in financial plannning certainly look quite different to the way they did 20 years ago, when many advisers started out as life agents before shifting towards a greater focus on more holistic financial planning.
An undergraduate degree – whether it is an area of study directly related to financial planning or not – is increasingly being looked upon as an advantage, as well as being a requirement to earn the Certified Financial Planner (CFP) designation.
Career changers continue to join the industry through channels such as AMP’s Horizon’s Academy, which is targeted primarily at those joining from related fields such as accounting, stockbroking and investment banking – as well as from many other backgrounds such as teaching, science, nursing and the military.
Tim Steele, director, Horizons Academy, says it’s important to know what you want to achieve as a planner before deciding where to start out.
“What are your aspirations, what do you hope your career’s going to look like? Do you want to be an employed planner offering more transactional type advice or do you want to be a relationship-focused planner and ultimately own a business or a share of a business?” he asks.
“The reason that’s a fundamentally important decision to make is because it either expands or limits your options as to what type of entry point you’re looking for. ‘Are you comfortable working for a small business’? is a really important question to understand,” he says.
Steele says if you want the comfort of a large corporate, then that sends you in a certain direction – in which case, there are a handful of options there to consider in that space. But if you are comfortable working for a small to medium sized business, that points to the aligned planner model rather than the employed planner model, he adds.
Depending on the licensee, a planner in an aligned business can have a large degree of autonomy in how they run their practice, but still benefit from the scale and resources of a large or institutional partner.
Aspirants also need to identify what their current strengths and weaknesses are in order to know which areas need to be developed more, according to Steele. “I would want to understand what someone’s previous experience was – their education, what transferrable skills they thought they had – and try to get a sense of the likelihood of them being successful in the near term and get a sense of what aspirations they had longer term with the career decision,” he says.
“Then I would make a recommendation whether they should get into a business development type role to refine their people and soft skills and their ability to engage and influence decision-making. If they had a strong background in [soft skills] but needed to refine their technical knowledge, I would suggest getting into a paraplanning or technical adviser support type role for a period of time,” says Steele.
Dr Mark Brimble, Associate Professor (Finance), Griffith University, and also sits on the Financial Planning Academics Forum. Brimble recommends that those going through a degree program start investigating their options well before they graduate. “Students can take internships or work experience programs to get that experience or foot in the door while they’re still studying, as opposed to waiting until they’ve finished their degree,” says Brimble.
“In terms of that transition, it’s important for students to realise they won’t walk out the door of any program and go straight into an advising role,” he says.
Brimble says there is an apprenticeship that needs to be served, and in terms of the emerging professional pathway, a common route – although not necessarily the only route – is to begin in a client services role before taking on a paraplanning role then moving to a junior adviser role
Mark Rantall, chief executive, Financial Planning Association, says a planner’s entry point into the profession will depend partly on whether they have done a relevant degree, in which case they could enter into a financial planning program and gain experience along the way – for example, as a paraplanner or support staff to a financial planner.
Those who come in from other fields or from unrelated courses of study could do a bridging program such as a Diploma of Financial Services or Masters program, then look to enter the CFP program from there.
“The important thing is they seek to get some level of experience working with a financial planner, because clearly the formal education is not enough to be able to start to advise clients. The experiential requirement is important to implement the theory you’ve learnt,” he says.
This article first appeared on Money Management
