Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Advisers offered ‘$50K bump in salary’ as talent poachers circle
Qualified and experienced financial services staff are at such a premium during the current adviser shortage that they’re finding themselves in the middle of bidding wars between practices, with firms making generous offers and counteroffers in an effort to keep talent on the floor.
Financial advisers with no compliance strikes and enough experience to manage a book of clients are the “epitome” of candidates, according to Kaizen Recruitment.
“Unfortunately, this pool is shrinking and advisers with 15+ years of experience now make up a small portion of the industry,” Kaizen stated in its 2023 Financial Adviser Wealth Management Salary Guide. “Wealth management firms are aware and are going to great lengths to keep advisers that are considering a move.”
Rather than letting advisers take up opportunities at competing practices, managers are increasingly fighting back at poaching attempts.
“Counteroffers at the extreme end have seen a $50k bump in salary, with most being between $20k-$30k,” Kaizen observed. “It doesn’t stop at monetary counteroffers, though. We have seen responsibility changes, title changes, and other added benefits, too.”
The counteroffers are often strong enough to keep the advisers at their original practice, Kaizen adds.
“These advisers are left with literally no choice but to stay, especially if they have been with a firm for several years, and the risks of new unchartered waters are not outweighed by the benefits of moving.”
According to Kaizen senior recruitment consultant Fiona Lu (pictured), larger practices and wholesale providers are better equipped to make strong counteroffers.
“The boutique providers have a more constrained budget and less scope to make counters,” she tells The Inside Adviser. “It happens more on the wholesale side, if we want to move them there’s usually a counteroffer involved.”
Salary uplift
The advice industry as a whole is undergoing enormous supply challenges, with uplifts in education requirements and regulatory standards adding to reputational pressure in the wake of the Hayne Royal Commission.
Other ancillary issues – soaring adviser levies and a dearth of professional indemnity options among them – have also contributed to the almost 50 per cent drop in registered advisers from since 2019.
These pressures have pushed wealth management salaries higher, Kaizen reports, with senior financial advisers commanding starting salaries between $140,000 and $180,000 per year. Standard financial advisers are looking at between $110,000 and $150,000 according to the report, while associate advisers (that have finished their provisional year) start at between $85,000 to $100,000.
“We’ve noticed salary increases,” the guide states. “Not just CPI, nor the odd $5K here and there, but significant increases across all levels of financial advice.”
Paraplanner salaries are also climbing higher, continuing a trend that emerged post-royal commission, when paraplanners were sourced by banks en masse to run their client review and remediation programs. Benchmark salaries are from $90,000 to $120,000 for a senior paraplanner and $70,000 to $90,000 for a standard paraplanner.
“Paraplanners are still in short supply and in high demand, especially those with significant experience or who are career paraplanners. Xplan experience continues to be at the forefront of requirements for client services and paraplanner positions.”
Notably, the client services role is being elevated as a skilled position as the demands of the role increase to match regulatory and compliance standards. Seniors earn $80,000 to $95,000 while standard client services officers (CSOs) can expect between $70,000 and $80,000 according to Kaizen.
“Client Services salaries have been increasing due to compliance increases and it is being seen as a niche and specialised admin role,” the guide states. “Most businesses are time short and are unable to pour resources into training an incoming CSO on their preferred platform or chosen CRM.”
