Join our investing community

Career Change - Financial Planner?

Discussion in 'Financial Planning' started by Chris C, 26th Oct, 2011.

  1. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Over the last couple of months I have been thinking that I might be keen on a bit of a career change and one of the options I was consider was entering into the financial planning industry, given that graduated in economics, I obviously post on these forums a fair bit and love business, economics and finance.

    So I guess I was just wondering if those that are already in the industry might be able to offer me a bit of feedback and advice.

    How's the industry as a whole going since the recent shake up?

    Where do you see the industry trending in the future?

    What does the typical day of a financial planner mainly consist of?

    What skills, education and qualifications are most employers looking for?

    What are the opportunities are there for financial planners to grow in the industry, ie how does one further their career in the industry?

    What does it take to succeed in this industry?

    What sort of income does your typical entry level financial planner make?

    Is there anything else I should be questioning before entering the industry?

    Thanks in advance.
     
    Last edited by a moderator: 26th Oct, 2011
  2. JPM Group

    JPM Group Member

    Joined:
    7th Nov, 2010
    Posts:
    21
    Location:
    Moorabbin, Victoria
    Hi Chris,

    Look the financial planning industry as a whole is a bit of a joke. The reason why i say this is 95% of financial planners utilize wealth management platforms for super/investments and insurance to generate commission. Most of these platforms have alot of cost associated to these and the clients really do get impacted.

    Also most financial planners will just invest accordingly to the risk profile of the client. Irrespective of the economy and markets, a client with a growth risk profile will have 70% in growth assets such as equity (Aust & Int) and property trust whilst 30% in cash/fixed interest. As you can see, the returns for clients would be impacted heavily.

    Our business utilizes SMSF and Trust as the platform and we buy direct. Most clients are holding cash as we expect the markets to continue the trend down. The issues in US and Europe are not well at all and the Government manipulation with cheap money and bailout programs is only causing the market to prolong the end point (which is down).

    I personally love what i do and our advisers have a greater knowledge of accounting structures, the global economy and its impact to asset prices. Certainly look into but make sure you seek to work with an independent group.

    The banking model is a good start, the entry level is approx 60K plus bonus. But trust me, good luck with this. You will develop great sales training and the ability to develope relationship with your clients. At the end of the day, the clients buy you!

    The industry will be interesting especially when the markets tip down again and hard into 2012. I think most financial planners might want a new change but dont let that discount you. Australians require independent financial advice, we add significant value as to strategies but unfortunately, most planners might save x client $10K in tax, but if there portfolio is down $150K then so be it. Clients do not see it this way!

    As for education, Diploma of Financial Planning is the starting point or RG146 requirements. Check out RG146.

    What does it take to succeed.. Well for me, hard work and dedication and aim to be independent and provide unbias advice.

    Hope this helps. Sorry for spelling but about to leave.
     
  3. Andrew Newman

    Andrew Newman Well-Known Member

    Joined:
    5th Nov, 2008
    Posts:
    175
    Location:
    Melbourne
    Hi Chris

    The financial planning industry is changing but this will only make it better - the strong will always adapt and change.

    The industry is trending towards two main models - the majority bank owned financial planners and the small group of independent financial planners.

    Skills, education and qualifications are important but the drive to succeed is much more important.

    The opportunities for new financial planners entering the industry is massive.

    To succeed in this industry you need to work hard and want to help people.

    Before entering the industry meet with a few financial planners over a coffee and have a prepared list of questions.

    Hope this helps.

    Cheers
     
  4. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Thanks for the replies so far guys. I really do appreciate them. And if anyone else would like to contribute to the conversation I'd really appreciate it.

    It's a big move to change career and it's not something I want to do lightly.

    Yeah that was my original fear. I graduated from economics at uni, and I don't think I would gain any fulfilment from selling overpriced products to clients when I knew there were cheaper and better suited alternatives.

    I would want to be a financial advisors that was actually able to "advise" a client on currently attractive investments within the market and tax advantages they could pursue.

    So how do you see the new government regulations affecting the industry?

    Are you able to suggest alternative investments then like commodities, precious metals, currencies?

    So what is the best way of going about finding an independent group? and do these companies what different qualifications or experience from their employees above and beyond the typical financial planner qualifications?

    I don't really understand what you mean by this?

    Are you saying that lots of financial planners are quitting?

    What can you do that is above and beyond this?


    What are the difference between the two?

    When you say the drive to succeed is important, what exactly does one have to be driven in regards to?

    Where do you see the opportunities and growth in the future?

    Also how do you see the new government regulations affecting the industry?

    That's a good idea - that said I was sort of hoping that this thread might also be able to give me some feedback to help me with my decision.

    Thanks again.
     
  5. builder2818

    builder2818 Well-Known Member

    Joined:
    31st Dec, 2008
    Posts:
    89
    Location:
    Sydney
    You can only provide advice on what you are licensed to (or what your license holder that you represent allows you too).

    You have to be prepared to cop a lot of abuse from your whinging clients because the majority of people think that when they invest their money it is supposed to keep going up and they will retire on this big account because your software models predicted it to and gave them a pretty graph to look at.

    I just hope for your sake your response to a whinging client isn't like the one I heard another financial give to their client the other day in response to the poor performance of their investments - "I don't have a crystal ball, I didn't know this was going to happen".

    Or lets hope you are not going to be like most of the other advisers I know of who don't know whats happening with their clients investments and it's not until they have a meeting with them that they run around like madmen or get their assistants to chase up information on the client so they can be prepared to look like they have managed the finances of the client all year.

    But in saying that, I don't think you should get into financial planning - put your economics degree to good use - but I guess that depends on what you majored in and if you marks were any good, if you just scraped through uni, you may just have to settle for financial planning but it would have been cheaper just doing your Dip FP.

    My personal opinion is I think the financial planning industry is a dying industry - there is still a lot of oldies that are suckered in to their BS but younger people these days are more investment savvy. Add to that the FFA changes coming in next year - you need to be a pretty good salesmen to justify why you charge the fees you will for some basic financial plan.

    Before anyone has a whinge especially a financial planner, this is my opinion along with many others I know. I have had a financial planner many years ago who I sacked and he worked independently. I now deal with advisers from some of the largest dealer groups in the country and I am less impressed with their knowledge and especially that of their assistants (please tell me it is a practical joke that you ask your assistant to obtain a tax statement for their clients retail superannuation fund).
     
  6. clayton4115

    clayton4115 Member

    Joined:
    20th Sep, 2007
    Posts:
    11
    Location:
    brisbane
    hello Chris,

    well having an economics degree is a very good start! if I were you i would start from the bottom up, like i did, i first started as a paraplanner and i did this for a number of years, i then branched into financial planning, working with westpac, however i didnt like working there as it was too sales focussed (and i am not a salesman), so i eventually ended up working for a mortgage company and service the books of this company.

    With the new regulations coming into force from 1 July 2012 i definitely think it is going to be harder for a financial planner as there is too much regulation now and more regulation post FOFA.

    I work for myself so I basically do everything such as statements of advice photocopying, filling out application etc, but i think you should definitely get some ground work first working as a paraplanner, get your technical skills up and then go out and give financial planning advice,

    on a typical day, i go out to the office at 8am and come home by lunchtime, then out in the evenings to see clients at their homes from 6pm onwards, but ofcourse if you are working for a company your hours would be like 8-5 or something.

    i do feel the SMSF sector of specialisation is probably the way to go if you want to get into Financial Planning.

    regards
    Clayton
     
  7. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Is operating this way financially rewarding? or just what you have to do to survive in the industry these days.
     
  8. clayton4115

    clayton4115 Member

    Joined:
    20th Sep, 2007
    Posts:
    11
    Location:
    brisbane
    i think any career in financial planning is financially rewarding.
     
  9. bennymarsh

    bennymarsh Well-Known Member

    Joined:
    10th Nov, 2007
    Posts:
    58
    Location:
    Sydney, NSW
    Hi Chris,

    Thanks for the PM, it's good to get an invite back here. Haven't been around for a while.

    I made a switch from Science, and I have found the move incredibly rewarding. I work for a "mid-sized" firm with ~150 planners. It makes the company small enough to still feel like a "family business", but big enough that we have good scale, great reputation and a fantastic business. I think a lot of enjoying financial planning is about finding a company you want to work for, and client's who respect the advice you provide and are happy to walk through the door and invest.

    But, to answer you questions, it's an incredibly rewarding profession. If you can help a client improve their finances, then you have secured the second most important aspect of their life (health being the most important). My best days were the days when i helped someone who was clearly in a poor financial position to take control of it, and give them hope of a secure future. (And due to that I'll disagree with JPM, SMSF's are the worst "product" you could put most people into, the number of non-compliant SMSFs is ridiculous).

    Anyway, as for salary, I started on ~70K as a planner with incentives on top. I ended up on ~$90K salary plus ~60K in incentives. Ultimately, planning is a technical sales role, so you need to love dealing with clients, and have the ability to sell them something, be it products or services. If you can't sell, don't bother, you won't do very well.

    As for other opportunities, i am now in a compliance and technical support role where i am earning far more than i was as a planner. There are management positions, business development positions, education positions, compliance positions, technical positions in most companies. I also had the opportunity to lecture the next generation of planners at a university. So there are heaps of areas to move to if you do grow out of planning.

    Anyway, that's my 2 cents worth. FoFA will make very little difference to our business, my role in the industry. In reality it is only going to make good planners more in demand and able to earn even more money. Planning has a fantastic future in this country, and i am looking forward to the next 10 years.

    My last piece of advice is avoid the banks. They have a churn em and burn em mentality, and any company that has that sort of planner turnover is not an enjoyable place to work. Look for a solid company with low employee turnover.
     
  10. Ahmoh

    Ahmoh Member

    Joined:
    20th Apr, 2010
    Posts:
    11
    Location:
    Sunnybank, Brisbane, Qld
    Hi Chris,

    We used to joke and compare financial planners to used car salesmen. You can be a terrific salesman with little technical knowledge and make lots of money from it.

    I think this is exactly where the industry is heading, you have banks on one hand doing hard sales and some small 'independent' firms trying to do right things but find it hard to compete with the big boys.

    Initially, you have to ask yourself whether the food on the table is more important than doing the right things by the clients, unless you are working for a well established firm.

    I have never worked in a bank and never will (although I have been approached a few time with great promises etc). I started with a family run accountant/financial planning firm, it was a good learning experience as I had to take care of everything - from admin to preparing SoA etc, and the salary was mere $40,000pa.

    But my salary was almost double when I moved to another firm in less than 2 years. ie once you done the hard yards, the rewards will be there for you.

    In the last 12 months I left the firm and started from scratch again because I want to spend more quality time with my family. The clients are hard to come by especially if you are a 'new boy in town' but I will keep knocking on the doors.

    The most important thing for me to stay in this industry is to see the clients walking away knowing they have a plan achieving their goals, whether you do it for a fee or pro bono.

    Good luck!
     
  11. powerjen

    powerjen Member

    Joined:
    24th Jun, 2008
    Posts:
    10
    Location:
    Brisbane
    I found BennyMarsh has the most positive answer to your queries. You are probably now further along in your decision making... there is something I am missing, that is what are your core values?

    My opinion follows. I feel you are quite intelligent and helpful, perceptive about economic issues. You are underselling your worth to the human race if you narrow your choice to solely financial planning; an industry corrupted by greed, admittedly getting better through reg. changes.

    Once I knew an economics professor who was also a financial education course and newsletter editor (combining two skills). That is one thing.

    There is financial coaching, run solo or with a small group. It is more for middle+ income earners to get on track financially (need some marketing skill). e.g. Money For Life Coaching (Peter Rodgers).

    I chose Financial Counselling over coaching or planning, as it aligns with my core values and interest.

    So choose a career based on your values, your main interests, best skills, and mission in life (if you know what that is), and then secondly look at what your income would possibly be and if that works for you. This is the way to fulfillment I believe - not choosing something based on XXK per year. If you want others to take care of business overheads and running, then that will also influence your decision. Some people need the security of having a 'boss' and others don't.

    I wish you well and hope you make your mark on the world.:)
     
  12. Chris C

    Chris C Well-Known Member

    Joined:
    2nd Apr, 2008
    Posts:
    1,327
    Location:
    Brisbane, QLD
    Thanks for the feedback powerjen. I really appreciated it and I think you are right on the money.
     
  13. lsmitchell

    lsmitchell New Member

    Joined:
    24th Apr, 2014
    Posts:
    4
    Location:
    Melbourne
    Hi Chris,
    I've stumbled across your old post today and must say I've found some of the responses you received very interesting.
    If you or anyone else, finds this post and is interested in understanding the 'warts and all' involved with making a career move towards financial planning, I'd be more than happy to help you out. I've had extensive experience helping people work through this exact issue and would be very happy to share my knowledge and expertise with you. Feel free to find out more about me from my LinkedIn profile, website, twitter or blog.
    Regards,
    Libby
     
    Last edited by a moderator: 16th Sep, 2016