Hi there. Some study advice needed No.2

Hello all,

I managed to come across the first thread through the search engine on study advice in the financial service industry.

Similarly, I am looking to change my career as a paraplanner first and then as a financial planner.

I have been working as a graduate in mechanical engineer for a little over 2 years, but have had unique explosure to commercial issues such as contract management. Regardless, I also have a Master degree in Technology Management. I hated engineering and always wanted to move in a finance related role. Reality tells me that it was almost impossible to move (even within the company which have financial roles) without further studies.

Personally, I have relatively solid experiences in the investment market and macro economics through self study and personal investment. Understanding all range of investment vehicles from shares including LMI, ETFs, ETCs (commondities), future markets (indexes, commondities), forex and all kind of managed funds including a range of hedge funds. My passion is definitely into investment / wealth creation.

Anyway, I have been looking to take up a Diploma of Financial Service (Financial Planning) but am trying to decide which education company I should go through. I will be doing this through distance learning as I cannot really take time off work to attend any of the intensive workshops.

1.) Kaplan offer the full DFS in distance learning for $695 x 4 = $2780. (without finsia membership)

2.) RS 146 Training Australia also offer a similar, if not identical course?, in distance learning for $2380.

My main question is, which one should I go for?

Which company offer a "better" recognised course? Offer better service such as personal advise/help during study? Which company offer better career help in looking for an entry level paraplanner job in the industry? Is one course better than other? Future education path through these companies? (possible advance toward the PostGraduate Applied Finance courses)

I'm confused because the Kaplan recommended 60 hours for each course, bringing a total of 240 hours for the entire diploma. While RS 146 Training Australia say approximately 24 hours per course. Obviously, I would like to complete the course as soon as possible.

Another difference is in their workshop offering (though I don't plan to take it but MAY consider if I face difficulties). Kaplan offer 3.5 full days per course while the other offer it in just 2 days per course.

Would be great if anyone could help me out on this! Many Thanks.

By the way, I live in Brisbane.

 

Hi Temjin,

You better do a search on Invested for our previous study discussions re RG/PS146 etc.

I'd say Kaplan, as an engineer you've already proved you are pretty smart.

Kaplan is done via distance and you can go into the city for the exam.

After you've done 1 or 2 subjects start applying for jobs in financial planning practices, they're dying to get their hands on people that have some idea and are looking for experience.

Cheers,

Dan

 

Hi Temjin

In my recent discussions with potential employers and financial planners, the feedback has always been to do the Kaplan course. My understanding is that the industry is short of experienced and qualified people (not the only industry though). I was offered 2 x jobs in financial planning businesses just from a casual catch up for coffee, and I hadn't started any training. Not sure what this says about the businesses (or industry), but they were happy to provide training and help fund courses. The entry level roles can differ, and the money wasn't great, but it's the start of a career journey, so there is usually a sacrifice involved somewhere.

I would recommend talking to some Financial Planners (there are also heaps in this forum). I did a search on SEEK and contacted them directly for a catchup. Most were happy to provide me 20-30 mins to introduce myself and talk about their business.

Most feedback was also to just start the qual and look for work straight away, most places are happy that you have committed to the industry and it is not necessary to finish the RG146 before looking. Although I personally think you might make a better candidate with the completed qual and that is the path I am taking. Also gives me time to prepare my personal financial situation for the likely pay-cut in the fist 6-18 months, that I would have to take.

I am sure you will get good feedback on InvestEd and there are several threads along these same lines. I am surprised there are no ads for training providers on this web-site yet, seems a likely market here.

Cheers. Tronc.

 

How much does Financial Planning depend on your salesman-ship skills?

 

Hi Dan, thanks for the advice.

That is what I heard from one of the coordinators at an information session I've attended from Kaplan.

The problem is that I have lots of ideas and practical investment experiences, but not necessary as a planner experience in which i have nil. So I would definitely need some more guidance on how to get my foot into the industry once I start studying or once I have finished with it.

Where is the best place I should look for such roles BEFORE I have completed my studies? I did my search on seek and have indeed seen advertisments for planners if you are still progressing your studies. But would like more networking opportunities, etc. I also listed most of the recruitment agencies that have specialisations in the financial service industry and have had placed ads for PP/FPs.

That still amazes me. And I thought engineers were in a critical shortage! haha

Your part on the time to prepare your personal financial situation for the likely pay cut in the first 12 months or so is very true. I am very aware of that, but since I am still considered as a graduate in my company as a mechanical engineer, the pay cut wouldn't be that considerable. A plus on this side at least for me.



I'm more toward the paraplanner as the entry role to this industry. I am assuming they are as in demand as financial planners?

My ultimate goal is to be in a firm that allow free selection of ANY investment vehicles to recommend, and not tied to a selected range of products that I know it is not in the best interest of my clients to invest in.

Though I think I need to be realistic at the industry. I guess I may have to be forced to "sell" something that I know I shouldn't, but if not will be at the expense of my employment and my company. So still trying to prepare myself for that..

I guess it's Kaplan then!

How long do one take to complete on course? I'm trying to set up a study plan to do all these within 6 months. Thanks for the help everyone!

 

Hi Temjin,

With Kaplan's "open ended" semesters and open book exams, if you did it full time you could probably knock it off in a week or two, do the assignment, it takes a week or two to get it marked and then they will ask you when you want to do the exam. You can do the exam on computers or on paper, if you do it on the computer you will receive your results immediately.

If you were totally insane (wink wink) you could cram it into two or three months, by starting a new subject every 2 weeks (If you were doing it full time) and potentially finish in two months!

You could definitely knock it off in 6 months.

Good luck,

Dan

 

Thanks AsxBroker.

Heh, not that crazy to cramp it all in 2 months. I need a life still!

6 months would be quite reasonable I guess then. Will definitely start looking for a job right after I start the first subject and see if I could get some networking going.

One quick question.

What do you think of the trend in financial planning/service in the coming years?

Let's assume the economy to go into a recession, everything slows down and investment also slow down. Do the demand on financial planners based on the recent credit boom alone?

I was wondering if FPs would still be in demand even if the economy crash when people are in financial stress looking for "help". hehe

Just to speculate on the future. But I guess it doesn't which industry I'm in if there is indeed a recession or worst. Thanks!

 

Hi Temjin,

Since I've been working since February 1999, I've always seen alot of jobs advertising Financial Planners. It's a bit like accountants, in the good times people want you to tell them how rich they are and in bad times people want you to tell them how poor they are. FPs have continued to be in demand through the techwreck (2000), Asian Crisis (1997), 9/11 (2001), etc.

Australia's population is aging, which means people are living longer and want to make their money last longer.

Assuming the economy goes into a slow down, this will be a wake up call for investors who expect 20% returns every year.

The demand of financial planners has little to do with Credit Markets, though what happens in credit markets has affected returns in all markets, ie, variable loan rates going up, yields going up and equities going down.

If the economy crashed people would still do real strategies like Transition to Retirement, even the most conservative client's can invest in cash while using a TTR strategy to minimise tax and maximise their retirement savings.

Things like life, TPD, Income Protection and Trauma insurance are not market linked, though obviously premiums may be more than what client's want to pay and now life, TPD and Income Protection (to age 65) can be paid through superannuation plans.

A consulting company called Business Health keeps on banging on about how the average age of financial planners is 55 and half of planners are supposed to be retiring in the next five years, there is supposed to be a massive demand when this half (of 14,000 FPs) retire, ie, where are they going to get 7,000 planners from???

Realistically and from what I have seen, I think the average is probably closer to early 50s, hence retirement may be 10 years away.

On seek you just have to punch in financial planning you get 1367 hit results, 597 of these are in Sydney, 66 out of 1367 jobs were listed today.

If there are 66 jobs being listed every day I think you'll be ok for jobs

Cheers,

Dan

 

That was a very informative reply there AsxBroker, thanks a lot!

Definitely agree with you on the part that FPs will still give advices on non-market related products such as insurances and other products at times of economic contraction. I was told by a colleague that FP get a large percentage of commission from insurances. Not sure if this is true or not.

In fact, what kind of commission structures are common out there? While I would love to maximise my income, I prefer to maintain my own moral principle of advising the best possible advice to my customers without resorting to hard selling to a limited, high fee, low performance products.

That is my "assumption" if I were to work for a highly restrictive company such as a bank. Sell sell sell.

The statistic on the average age of financial planners did surprise me a bit. I really wonder how many young FPs are out there? As in their mid-20s such as myself. If the general demographics of FPs are old, then a young guy like me might not convince the customers of my ability to give wise advises. (though I'm confidence that I know a lot more about finances and investment than the average people)

And I wish I was in Sydney. Hope the demand is as high in Brisbane, but I do follow the job ads almost every day and find there are still a significant demand here.

Now I'm getting more excited about changing my career ASAP! heh

 

Hi Temjin,

Depending on what you specialise in, you could get remunerated mainly on insurance policies. As a contractual agreement they do pay high upfront commissions, the old life agents used to purely get paid on upfront commissions. If they didn't sell, their families didn't get to eat.

Nowadays, insurance policies have upfront and ongoing commissions, alot of pure insurance brokers, will switch clients every couple of years to get another lot of upfront commissions.

Personally, I believe for alot of people there is not too many reasons now to have all life, tpd and income protection (to age 65) inside super and trauma outside of super. Hence, it's not just about insurance, it's the whole package.

I used to be sceptical about banks, now I work for Australia's fifth largest bank and they let me use almost any product, well all the ones which are 4 and 5 star rated by ChantWest.

I have heard that "Witch Bank" and "a bank starting with N" are very narrow in product selection, ie, bank N only lets their planners write insurance with an insurer which is owned by them and place money in investment funds also owned by them, similarly for bank of Witches which always intrigues me why this platform is mentioned ad nauseaum on this website.

It can be tough, I know a female colleague who has difficulties with older men and women as old habits are hard to kick, these older folk were brought up thinking that age is knowledge, ironically, a 50 year old could do DFS (FP) and be seen to be more knowledgable with less experience than a 30 year old who has been advising clients for more than 10 years. It's also important to show the client strategy, once you should them the value you can add they usually come around.

Working in a bank, you come across alot of people who love their term deposits and it can be occasionally frustrating when they want an extra 0.20% on their term deposit when you can save them 30%. For those client's you have to accept that you can't change them, for the ones you can help and will take your advise, excellent as your adding value.

Good luck with it

Dan

 

Hey,

Hmm...I'm more interested in managed investments, shares and dervatives. I guess I shouldn't worry too much about remuneratuation at this stage.

What exactly do you mean "almost" any products? What about individual shares, and even international one? What about hedge funds? A selection of 500ish managed funds, and rated only, is not what I call "any" products. hehe

I almost prefer a total freedom to selection of investments. I guess that would only be possible in a smaller, private wealth creation company. Bountique investment firm, etc?

Haha, you've made it obviously which two banks for me to avoid. Got ya.

Yep, I agree that it can be tough. The problem is that a lot of HNW individuals tend to be older and I guess it would take a lot more work to convince them of the quality of advises I'm giving. I don't mind a challenge.

I'm basically fine with people's psychology biases so no problem in that.

Thanks alot for the help again. Lots of useful information in this thread for other future wanna-be-FPs.

Cheers,

Temjin

 

I would actually want less access, there is alot of not-so-good fund managers out there. Alot of them do similar things, ie, there are alot of Australian Fixed Interest fund managers, lots of Value style Australian Share fund, etc. It's not like your going to split your client's investments across all 500 funds are you? Hedge funds are there. Every different style of investing is there. You'll figure out reasonably quickly which funds are worth staying away from.

Possibly not, it depends on their Compliance Manager, the thing I've always disliked about boutiques (apart from charging more) is that they are small licensees. If the s**t hits the fan, it's all over (ie, the company folds as they can't afford to pay compensation to clients who have been wronged, ie, WestPoint, some smaller financial planning group has gone into bankruptcy. Too bad for the clients who have lost money). I know that a large licensee if anything ever goes wrong, the deep pockets of the company will stump up. This is more a personal moral issue and how I feel about if I went to a planner.

With a large licensee, rather than having one compliance manager who might even do something else full time in a small licensee, they have many employees dedicated to helping their planners being compliant, whether this is additional training, audits, etc.

No worries, glad it's been very helpful.

 

Yes, I understanding the managed fund market out there. My point is that I do not want to limit my advice to "funds" only, but various international shares (like ETFs, ETCs), dervatives, etc. Of course, these more advanced stuff and I doubt I would be able to "advise" them until I gain some more practical experiences.

Hmm..interesting, I guess I will get a feel of it when I start working in the industry.



One more important question.

What is the working lifestyle as a financial planner, or paraplanner?

Is it really long hours, or is it more of a standard 9-5? Are there occasions where one is required to work over the weekend to meet certain deadlines. (i.e. producing a SOA to a client) How frequent is it? How stressful is it? Does it difference between working in a bank or a smaller private firm?

My main concern is that I will be switching from a fairly comfortable and flexible workplace from a government corporation to a private company. I fully anticipated the "downgrade" working condition. However, I would still like my work and life to be fairly balanced. I will be very hestiated, if not, very flustrated, if I am required to work long hours in this field frequently.

I need some time at home after work to continue to work on my main business, which is still considered as a much higher priority than my daytime job. (but still need a fulltime job to maintain my lifestyle)

Thanks alot again then!

(P.s.: Just received my first ELC course. Now to setup a study plan to make sure I finished all 4 courses in 6-7 months. )

 

Hey Temjin,

Thought i would have a go at answering some of your questions about the working lifestyle.. I think it will depend on who you work for.

Banks are generally known as 8:30am - 5pm workers with very little overtime if any at all.. Private workers will depend. I work from about 8am to 6pm.. Occasionally i start earlier and occasionally i finish later. The biggest day i have had to do working here is about 13 hours

I work for a small practice with one other planner and a personal assistant, so we do all the work, including paraplanning... If you work for a fairly big practice you might find that there is enough people to cover the work and you only have to work 9-5..

Flexibilty will depend on your boss and workplace.. I don't get paid for overtime, but i am allowed to go home earlier or if i need to go to the doctor i can go and will still get paid. But that was our agreement.

As for your courses, good luck with them and if you need help with the assignments i have completed all of them in the last 12 months (except super & retirement which i am awaiting the mark)..

 

Thanks alot bailey.

I guess they match my expectation if I am to work for a bank or a small private firm. Larger corporation surely do have friendly work / life balance policies in place while small private firm tend to be more "flexible".

It would be hard for me to adjust to a 8am to 6pm type of job since I am so used to 7.6 hours flexitime for the last 2+ years, working in a government corporation.

Unpaid overtime or regular long hours will definitely put me off ALOT.

Still going through the first course, ELC. It's more "generalised" than I previously have thought and some of the concept are fairly basic. Which is good cos I thought I would take alot more time to go through the materials before. 5-6 months to finish through the entire diploma becomes achievable now.

You got any ideas on looking for a job BEFORE I complete my diploma?

Thanks again!

 

Should also add, small private firms tend to pay less then the bigger firms and banks..

You might be in trouble here unless you work for a bank.. To get ahead of the pack you have to be willing to put the hours in.. and this means unpaid hours. This will get you noticed..

The practice i work also has an attached accounting practice and i have noticed the accountants that come in at 8:30 and leave at 5 are the ones who are getting left behind..
The ones that come in a bit earlier and stay a bit later are getting all the benefits..
Its what you need to do when you start a new job. You need to stand out and arriving right on time and leaving right on time and taking exactly an hour for lunch is what the boss expects the admin girls to do, its not what professionals do. <--- the accounting boss said these exact words to me!!!

Banks will most likely be different from the above but most private practices, large or small are like..

If you really want to do it in 5 - 6 months you will need to order your second course before you finish you first course.. The reason for this is that it can take up to 2 weeks to mark your assignment once submitted and then you need to give two weeks notice for your external exam (not sure if you are doing external exams).. So thats one month gone already.. So four courses there is four months gone and thats just waiting time!!!!!!

I ended up ordering the next module when i submitted my assingment so I was starting the next module before my assignment had been marked. That way i minimised the time i was waiting doing nothing!!

I aimed to do it in 6 months too.. but then i got a job in the finance industry and that blew out to about 11 months by the time i finish this last course..

Not really... The main jobs you can go for would be trainee planners or paraplanners as you won't really need your RG146 qualification to do those jobs... Most banks and big organisations won't touch you if you aren't RG146 compliant..

I would check online job boards like Seek and look for entry level paraplanning or trainee planner jobs.. The only problem is the money most likley will be alot less for the entry job... And moving from government cushy job to trainee job might not be your cup of tea... But good luck..

 

I assume you have to go into one of their centres to do the exam - it can't be done online?

 

No you can definetly do it online... You can choose paper or online and you can choose to do it externally or at an exam centre place.. Online is the best as you get the marks back straight away. If you do a paper exam i think you have to wait a week or two for the results.

It costs a bit more to do it externally i think (can't remember how much). THey even send there own person out to watch you while you do it.

You can do it anywhere except a residential address.. So that means public library, internet cafe or a business address.

 

Hey Bailey,

Thanks alot on the replies.

That would indeed put me off because like I said, I work to live and not the vica versa. A typical Generation Y view where we value work and life balance far more than anything else. A boss want me to stay till 1am twice a week or so to finish the job? I would give him the middle finger.

Though I understand I don't have much of a bargaining chip in the first 2-3 yrs of my new career, but I wouldn't be pushed to the edge where I am demanded to sacrifice my social life for the well being of the company.

However, getting ahead of the pack through my day time career is not my main priority. It doesn't say I am not ambitious, I have my own business plan that I need spare time at home to develop. The earning potential is far more than one would get from a job and I am placing it as my highest priority over anything else. The point in financial planning career is to get away from my government engineering job and do something I am more interested in doing day time and maintain my existing lifestyle and accumulate some capital. (including social lifestyle)

I guess finding a position in large firms as a paraplanner is a good start for me. It should get me more disciplined before I progress to more "stressful" jobs.

My understanding of the online exam is that it is open book and can be done purely at home without the need of anyone coming out to watch you. And I doubt it cost extra as well because it was not mentioned at all when I joined the courses.

Registering for the next module had very little lag as well. I planned to finish my assignment first, leave few more days to read through summaries, do the online exam and immediately register for the next course after the exam. Of course, assuming I pass everything.

This is what going to hurt me. But I need to be prepared to get out of the comfort zone. I don't think it's THAT BAD of a change, is it? I'm expecting no less than low $40k for entry level after I finished my DFP. I have prior contract administration and project management experiences after all. (in major engineering contracts)

I'm sure this will all worth it in the long run. Thanks for the help again.

 

I think you should download the "Exam Booking Form" and have a read of the conditions. Alot of these conditions are mentioned until you actually go to do the exam. I didn't find out about these until i actually went to sit my first exam and then realised i had to find a non-residential address to sit the exam during business hours (which is kinda hard when you work full-time!!)..

Booking form here:

Code:

http://www.kaplan.edu.au/GetAsset.aspx?assetid=2da340b4-0bb9-4991-b3f3-96a51de555c7

Specifically -
- External exams held only during business hours
- External venues will not be booked unless a minimum of 14 days notice is given.
- External exams will only be held at a business address or a public venue (i.e. public library) not a residential address.
- It is your responsibility to organise external venue.
- Exams held at Kaplan offices require at least 5 working days notice.
- The cost of the first sit exam undertaken at Kaplan is covered in the cost of the course materials.
- The cost of an external exam with 4 or less candidates is $150 per exam.

My main point about the lag is that assignments can take up to 2 weeks to be marked (mentioned in student handbook) and you cannot enrol in the exam until you pass your assignment. So even if you do your exam internally it can still take up to 3 weeks from submitting assignment to actually sitting exam.

3 weeks to 4 courses = 3 months of just waiting!!!

$40k after finishing your Diploma is about the minimum you should except!!