Base salary set to rocket financial planners

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The future appears to be looking bright for Sydney-based financial planners after a new survey suggests they will receive a substantial annual salary increase this year.

The increase, highlighted in the 2014 Robert Walters Salary Survery, indicates a pay rise of up to $50,000 from 2013 for senior financial planners and up to $25,000 for financial planners. But what exactly is behind the salary jump?

Pamela McDonald, Robert Walters' manager of financial services operations and financial planning, said it is partly due to FoFA regulations, which are moving away from commission-based models and into a fee for service structure.

This has seen base salaries adjusted as commissions stop being collected, she said.

“It’s going to change the market. Some of the advisers and planners aren’t too happy with it. It will be a period of adjustment,” she said. “From the client’s side, they are expecting a lot more. They are looking at what’s happening abroad and becoming more market savvy.”

The move towards fee for service may have contributed to the Australian wealth management sector becoming one of the biggest growth industries during the 2013 year, due to the necessity for increased customer engagement in order to focus on retention and winning market share.

This sector saw busy activity particularly in financial planning, where qualified financial and para planners were in continuous demand and moved between organisations.

The survey indicated that salaries in banking and finance are expected to grow on a year-to-year basis on average by 2.81% in comparison with 2013, and those who can communicate on a commercial level are set to receive the biggest increases.

McDonald said customer interaction will continue to be important.

“There is a big focus on client service here. Clients are more aware and expect a much higher level of service. It’s one area we’ve been seeing a lot of recruitment at the moment,” she said.

Other trends in the financial sector include increased competition for chartered accountants with commercial experience, rising popularity in hybrid roles which bridge the gap between finance and wider business, and more positions opening up across the board as the economy continues to improve.

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  • Mervin C Reed FAICD on 20/02/2014 10:01:13 AM

    These cost rises are almost entirely the fault of the present Chairman of ASIC - Greg Medcalf who cannot accept that product is to blame for 90% of the industry failures. The fundamental ASIC view is to make it so difficult to provide advice that the whole advice Industry will go away. Now that the whole future of ASIC is being discussed Medcalf again cannot help himself and is attacking planners. Remember these are the people who mandated 45 page financial plans and then complained that they were unreadible. ASIC problem is that it is full of public servants like the FSA in the UK and becoming increasingly irrelevent. Medcalf needs to smarten up the ASIC responses to what it is being told by the Industry or the Government should sack him and find another Chairman who will do this. Taxpayers question Metcalf's motives, and if he cannot change then he should be terminated. He cannot have it both ways.

  • Michael K on 20/02/2014 11:13:22 AM

    Not sure if it's fair to put responsibility for cost rises at the feet of one person. However I agree Medcalf and many others find it easy to demonise advisers and dismiss their own responsibility in poor advice outcomes.

    In my opinion personal responsibility is a wide issue in our society generally.

    Relating to compliance: I turned away 18yo wanting income protection this week because I wasn't allowed to simply give him what he asked for without re-writing war and peace. Is that right? Or should I carry clients who (due to over-regulation) represent a cost base to my business...? Or should I charge our 18yo the venerable 'fee for service' (asic's fix-all) to cover my time to do a full needs analysis and write SoA etc. Because, as we all know, if I don't do that I'm 'not doing my job' (according to asic).

    What annoys me is that as a professional licensed adviser I have no option to assist this young man. But he can phone real insurance (or equivalent), or join any industry fund, and receive no support and likely the wrong product.

    There is a myriad of Australians who suffer with poor outcomes from limited or no advice. We all meet them every day. I met some yesterday, horrible high cost debt structures yet with large available equity, thought they were covered with basic industry fund insurances they were woefully inadequate, high risk in other respects across the board.

    Another last week, client overpaid $100k+ in taxes in last 10 years due to no/poor advice.

    Client with $1.3m in losses due to bad advice (told to put everything in two shares in companies which subsequently disappeared) didn't seek alternative advice because 'he couldn't afford it, had no money left'.

    The fact we all see this every day, the fact this real problem is barely acknowledged let alone addressed, this is the real problem and should be the focus. Not adviser- or Medcalf- bashing. imho.

  • Ben CFP on 21/02/2014 11:37:07 AM

    $50k pay rise??????? Obviously has not included bank planners. Try 50 cents if we are lucky!

  • Only the FP industry on 23/02/2014 4:18:36 PM

    What a load of rubbish. Planners are exiting this ridiculous business in droves. What moron would put up with the circus let alone the risk to your personal assets. It's a shame what the FPA has done to this industry & it's members. No practice can afford these pay rises anyway now that the public is wising up to being overcharged by 90% of FP's out there. Would the last IFA shut the door please.

  • Risky Balaji on 24/02/2014 8:28:00 AM

    That is plain Rubbish. NAB has just reduced the pay for planners, sighting pie in sky reasons.FPA and ASIC are both good for nothing

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