The long road to becoming a financial planner in Australia

Major changes in Australia’s financial planning industry now require significant skills and qualifications for financial planners that extend well beyond the minimum university degree that became mandatory on 1 July this year.

Students interested in a career in financial planning can now choose from 17 Australian universities that have the appropriate curricula for a financial planning qualification.

Financial Planning Association chief executive Mark Rantall said all the building blocks were now in place to start generating a consistent pipeline of graduates with the right qualifications.

After graduation, prospective financial planners would typically start at the bottom. James Gerrard, Certified Financial Planner (CFP) of PSK Financial Services, said the normal entry-level role was administration to provide would-be-planners with a solid understanding of how a financial planning business worked.

After about a year, a motivated person should progress into a ‘paraplanning’ role, which typically lasted up to two years, and provided exposure to the rules and regulations governing financial planning, and the basics of strategy and planning. After successfully navigating this period, a paraplanner would be ready to become a fully fledged financial adviser.

Be prepared to work hard for not very much money in the early years. Administration clerks earned between A$35,000 and A$55,000. As a paraplanner, the salary would be between A$40,000 and A$85,000. A financial adviser should expect to start on a basic salary of A$60,000 to A$70,000, but with incentives and commissions, total package might come to A$100,000 in the first year.

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This career progression must also be accompanied by the completion of the certified financial planner course of five modules, which typically took one to two years to complete.

Some people were able to enter financial planning at a higher level – lawyers and accountants, for instance, could go straight into an advisory role, but this usually applied only to people with very specialised knowledge who worked together with certified planners, and who completed the Certified Financial Planner (CFP) course.

The long road to full certification and the accompanying low pay meant that it was not the easiest route for a person looking for a mid-career change, said Gerrard.

“I get CVs from accountants and other financial professionals with MBAs or people degrees in finance and law, but you must be prepared to put in the time and take a huge pay cut.”

After qualifying, CFPs were required to do at least 40 hours a year of continuing professional development to maintain their status. This meant attending workshops, seminars, and conferences, as well as webinars, reading and courses.

All continuing professional education and development was tracked to ensure there was no embellishing. And the FPA even conducted spot audits to verify records.

Award-winning financial adviser Michelle Tate-Lovery, MD of Unified Financial Services, said a good financial planner could use social media such as Twitter and Facebook to keep up to date with what was happening in the industry, and join specialist boards through LinkedIn. There were also interest groups and sub-groups, such as young adviser groups, women’s’ groups and mentor programmes.

And then there were the so-called ‘soft skills’, which Greg Cook, CEO of Eureka Whittaker Macnaught said were learned from experience. These included how to build a rapport with clients, how to do initial interviews, and how to manage delicate situations.

“Planners and trainee planners must be able to articulate advice competently to clients to justify advice fees. “

Tate-Lovery said that anyone considering a career in financial planning should consider how his or her employer would enhance career advancement.

“You need to be culturally aligned with your organisation, understand its values, and be aware of the role and its expectations of you. You need to ask the right questions: what is the business’s unique proposition, and will the business will support you by, for instance, paying for professional development.”

The full version of this article first appeared in first appeared in the Money Management Careers Guide 2013.