Roy Keenan from Yarra Capital Management shares insights with James Dunn from The Inside Network on the role of active management. The Inside Adviser
After the Hayne Royal Commission many advisers decided to steer away from large dealer groups in favour of becoming self-licensed. In the last six months, however, that trend has taken an abrupt turn.
‘Make it cool’: Hunt for grads heats up as professional service firms scramble for talent
While the government’s mandated professional year was meant to smooth the pathway for young acolytes to enter the industry and fill the void left by 13,000 departing advisers, the flow of young personnel into the industry is being challenged by calculated efforts from other professional services players to swell their own talent coffers.
Consulting groups and institutional banking groups are more aggressive than ever in picking out high academic achievers, according to Alisdair Barr, founder and CEO of financial services grad placement firm Striver (formerly Grad Mentor).
These groups are offering 21-year olds $130,000 salaries straight out of university, he told a room full of advisers at the recent SMSF Association National Conference, for the highest performing students across the country.
Advice practices, however, shouldn’t be too concerned according to Barr.
“What I want to say is don’t worry, right? This is the academic cream of the crop that Macquarie Bank need to go and take, they just scroll down the highest grades at university and pick them up, put them through hardcore psychometric assessments and pick those ones out,” he said. “They’re not necessarily the people that you’re going to want in your firm, there’s other things that we should look for.”
Advisers shouldn’t be afraid of these high-level poachers, he explained, buy they should know about a couple of relevant trends when it comes to higher grads. And while young advisers, typically from ‘Gen Z’ who were born in the late 1990s or early 2000s, won’t be expecting a $130,000 pay slip, inflation and an undercurrent of demand have seen starting salaries rise considerably.
“The average salary over the last two years for a graduate coming out of universities across all disciplines – so nursing, engineering, medicine, investment banking and so forth – has gone up from $68,000 to $76,000 in the last two years,” he said.
Such is the demand that 88.3 per cent of all 2023 graduates already have full-time roles, Barr said. The ‘Big 4’ professional services firms were active players in the graduate hiring market. Deloitte, for example, took 1,300 grads in 2023 – its largest ever intake.
All this activity is making it difficult for employers to get quality candidates, he added. According to the HR Institute of Australia, 48 per cent of employers are finding it difficult to find new recruits.
Both the financial services and professional services sectors may need to work on their image and the way they present themselves to graduates, Barr believes. The Australian Association of Graduate Employers reports that no financial services or professional services groups were rated in the top ten of employers most recently.
“We’re not getting a whole bunch of people going ‘I want to go and work in a private practice, professional service firm in the suburbs’,” he said. “We’re just not getting a lot of people will be interested in that because it doesn’t look that cool. How do we make it cool? We know it’s cool, but it doesn’t look cool. So lets get what we know out.”
