Becoming a Financial Planner: a Tale of Three Pathways

There has never been a better time to start a career in financial advice.

The Financial Advice profession is sometimes called the “unknown” profession.  For many high school student and university graduates, there is a complete lack of awareness about financial planning as a career.  With no clear and reputable pathway to the profession until recently, it was a confusing journey to navigate.  When coupled with corporate greed and contempt for clients highlighted by the Hayne Royal commission, the profession has a major trust deficit.  No right-minded parent would be recommending their children pursue such a career.

But, ironically, these are the exact reason why now is the perfect time for high school students, university graduates and career changes to pursue a career as a Financial Planner.  Many Advisers are leaving the industry, and the reality is that the need and demand by clients for quality financial advice will not diminish. In fact, it will increase – with COVID-19 implications, changed working conditions, and the challenges of recession.

But how do you become a Financial Planner?

Anyone wanting to pursue a career in financial planning (known as a “New Entrant”) must enter via one of a few pre-determined education pathways:

  • Pathway One – Complete an approved Undergraduate Degree.
  • Pathway Two – Work in the industry, complete Vocational Qualifications (Diploma & Advanced Diploma) and apply these as Credits against Pathway One. The “earn as you learn” approach.
  • Pathway Three – Complete an approved Postgraduate Degree (entry requirements apply).

All pathways also require a New Entrant to complete a Professional Year Program and pass the national FASEA Exam before being registered on the ASIC Financial Adviser Register as a Financial Planner. Let’s explore each of these pathways using a real-world example.

Pathway One:  FASEA approved Degree direct entry from high school

Jacqui was a good student in high school and achieved an ATAR of 95.  The subjects she excelled in were maths, english, economics and legal studies.

Jacqui is highly analytical, good at writing essays and reports, and is caring in nature.  Her parents would like her to use her high ATAR to enrol in a Law Degree.  However, Jacqui has decided not to pursue a career in law as she has some family friends who are lawyers and feels the work-life balance does not suit what she wants in her life.

Jacqui considered accounting, marketing, and financial planning as three possible career paths.  Ultimately, Jacqui decided to pursue a career in financial planning.  The reason was simple – a few years ago, Jacqui’s uncle suffered a stroke and was unable to work.  He had a financial planner who had arranged personal insurances for her uncle prior to the stroke.  As a result, her uncle and his family were looked after financially, and her uncle was able to focus on getting better.

The financial planner was actively involved in helping her uncle make the insurance claim and working out the financial implications.  Jacqui never forgot this and came to realise that this level of positive impact on another person’s life is something she wanted in her choice of career. 

So, Jacqui decided to complete a Bachelor of Commerce (major in financial planning).  The degree was a FASEA approved program, and she understood the remaining hurdles she would need to complete before becoming a Financial Planner were:

  • Complete a twelve-month Professional Year Program
  • Pass the national FASEA Adviser Exam during her Professional Year.

How did Jacqui move from study to a career?

  1. It took Jacqui three years full-time study to complete her degree. Her course debt at the end was $36,000 which will be paid off through HECS.
  1. She was 21 at the time of her graduation. She was able to secure an “Associate Adviser” role in a small financial planning practice where she completed some part-time intern work during her degree, about a thirty-minute drive from her home.
  1. The initial salary package was $55,000 (including superannuation).
  1. Jacqui worked in the Associate Adviser role for two years, during which time she was mentored by the Practice Principal and learned an enormous amount about how a financial planning practice operates.
  1. Her boss registered her for the Professional Year (PY) Program at the beginning of her third year in the Associate Adviser role. Jacqui was 23 years old when she commenced her PY.
  1. Jacqui completed her Professional Year and passed the national FASEA Exam halfway through the PY.
  1. After completing the PY, Jacqui decided to take a six-month career break to travel overseas and “chill out” as she had not had a proper break in years.
  1. Jacqui returned to the same advice practice and shortly after her 25th birthday, she was registered on the ASIC Financial Adviser Register as a Financial Planner.
  1. Her salary package was now $88,000 (including superannuation).

Pathway Two:  Full-time work, part-time vocational studies, and then part-time university degree

Steve went to school with Jacqui, although they had a different circle of friends.  Steve liked school and was happy with his final years’ effort, although his ATAR score (70) was not enough to pursue any degrees that were of interest to him.

Feeling a little burnt out after high school, he decided to get a full-time job while he worked out what he “wanted to do with his life”.  A family friend was a Financial Planner who had his own practice and was looking for a Client Services Officer (CSO).  Steve took the job thinking it would be a good way to earn some money while he figured his life out.  His starting package was $50,000 (including superannuation).

After six months in the role, Steve developed a keen interest for financial planning as a career.  He liked the fact you could help ordinary people manage very complex situations and build a profitable business around it.  Steve also noticed that office hours were 8.30am to 5.30pm and there were no after-hours work commitments.  It seemed to be a career that offered a good work-life balance and promoted ongoing learning through Continuing Professional Development (CPD).

After a conversation with his boss, Steve decided to complete a vocational qualification called the Diploma of Financial Planning offered through a Registered Training Organization (RTO). It was a twelve-month program, delivered online with optional face to face sessions, and it would give Steve an insight in to whether financial advice was the career for him.  As Steve’s highest qualification was his High School Certificate, he was eligible for Government Funding, so the Diploma course did not cost him or his employer anything out of pocket.

Steve completed the Diploma of Financial Planning in 12 months and was 19 years of age when he graduated.  He enjoyed the studies and so his boss suggested he complete the Advanced Diploma of Financial Planning.  Once again, given it’s a vocational qualification, he was eligible for Government funding and the course did not cost him or his employer anything out of pocket.  The course duration was twelve months.

Steve completed the Advanced Diploma in twelve months and was 20 years of age when he graduated.  At this stage, he was offered the role of Associate Adviser in the practice on a salary package of $65,000 (including superannuation).  Steve indicated he wanted to take a six-month career break to travel Europe with some friends, so he and his boss mapped out a career plan for when he returned.  Steve would be 21 years old when he returned

The plan was:

  1. Upon his return, Steve would take on the role of “Associate Adviser” role on a remuneration package of $65,000, (including superannuation).
  1. Steve would apply to university as a mature age student (21 years or older) in the Bachelor of Commerce (major in financial planning) which was a FASEA approved program. Steve would seek 12 credits from the university towards a 24-credit degree, based on his Diploma and Advanced Diploma qualifications.  This meant he may only need to complete 12 more subjects. The university offered trimesters and Steve intended to work and study part-time to complete the remaining 12 subjects within 2 years.
  1. Steve completed the degree shortly after his 23rd birthday. His course debt at the end was $18,000 which will be paid off through HECS.
  1. Steve’s boss registered him for the Professional Year (PY) Program. Steve passed the national FASEA Exam halfway through the PY and completed his Professional Year on time. Steve was 24 years of age at the end of the PY and was registered on the ASIC Financial Adviser Register by his boss.
  1. Steve was promoted to the role of Financial Planner and his salary package increased to $88,000 (including superannuation).

Pathway Three:  Career Changer – part-time Postgraduate Diploma

Mark was a Manager at a large Theme Park.  With the onset of COVID-19, the tourism industry was heavily impacted, and he was made redundant. 

Mark loved his job and enjoyed helping people get the most out of the experience at the theme park.  Mark had entered the industry 10 years earlier from university after completing a Bachelor of Arts.  During his time with the Theme Park, he was constantly learning and broadening his skills set and was highly proficient with financial statements and had excellent interpersonal communication skills.

At a friend’s BBQ shortly after being made redundant, he was speaking with someone who, upon hearing his skill set, suggested Mark might consider a career in financial planning given he was good with numbers and enjoyed dealing with people.

Mark investigated the requirements of becoming a Financial Planner as a career changer and discovered he must:

  • Complete a Graduate Diploma of Financial Planning (8 subjects). His Bachelor of Arts met the entry rules.
  • Complete a Professional Year (PY).
  • Complete the national FASEA Exam in the first 6 months of the Professional Year.

Mark was willing to do this.   He approached recruiters, as well as financial planning firms in his local area.  His persistence paid off as he was offered a part-time role as a Client Services Officer (CSO) with a local firm. The owner of the practice said he was willing to take a chance on Mark because of his skills set, his maturity and, should things go well, a possible option to purchase equity in the business overtime as a gradual succession plan.

Mark and his boss then mapped out a plan which involved the following:

  1. Mark commenced employment part-time (2 days per week) and commenced his studies in the Graduate Diploma of Financial Planning (GDFP) on a part-time basis. The aim was to complete the eight subject GDFP within 18 months, given the university offered trimesters.
  1. Over the 18-month period, Mark’s role would expand to include paraplanning and he would increase his working hours from 2 days per week up to 4 days per week. His starting salary package was $55,000 (including superannuation) on a pro-rata basis.
  1. Mark completed the GDFP in the 18-month timeframe. His course debt was $24,000 and this was deferred under the FEE-HELP scheme (payable through the taxation system, much like HECS).
  1. Upon completion of the GDFP, Mark was offered the role of “Associate Adviser” with a remuneration package was $70,000 (including superannuation). This was a full-time position.
  1. At the same time, Mark’s boss registered him for the Professional Year (PY) Program.
  1. Mark completed his Professional Year and passed the national FASEA Exam halfway through the PY.
  1. Mark was registered on the ASIC Financial Adviser Register as a Financial Planner.
  1. Mark was promoted to the role of Financial Planner and his salary package increased to $88,000 (including superannuation).

Mark and his boss agreed that after one year’s full-time employment with the firm, they would discuss a possible business succession plan to be executed over a ten-year period.

Which is the best way to skin a cat?

No one pathway is better than another.  They are all designed to meet the differing needs of individuals in different circumstances.

In reviewing the pathway options, it is important to consider the resultant position each creates.

Name

Pathway

Financial Planner at age

Remuneration Package

Education Debt to be repaid

Jacqui

High school to University

24-25

$88,000

$36,000

Steve

High School to work and vocational & university

24-25

$88,000

$18,000

Mark

Career changer – work and university study

30+

$88,000

$24,000

What does the above table tell us?

  • There are several ways for someone to begin a career as a Financial Planner. Each provides flexibility based on an individual’s circumstances and achieves the goal of becoming registered on the ASIC Financial Adviser Register as a Financial Planner
  • Steve has used the “earn as you learn” approach, whilst Jacqui has taken the education pathway by continuing to university direct from high school.
  • Mark was a career changer that has used his professional and life experience to secure his first role in the industry. The above debt level for Mark does not take in to account any debt he may have incurred as part of his Bachelor of Arts.
  • We have assumed all 3 people have started on the same remuneration package once they become registered on the ASIC Financial Adviser Register as a Financial Planner. In the real world, this may not necessarily be the case and may vary depending on the individual’s experience and other factors.
  • Education debt levels – there may be a significant difference between the level of education debt each pathway incurs. Steve has used government funding available in the Vocation Training sector to reduce his overall education debt levels.  If it was the case that he was not eligible for this funding, then he or his boss may have had to pay upwards of $5,000 or more (in total) for the Diploma and Advanced Diploma qualifications he attained.

This would then bring the debt levels of Steve and Mark in line with one another.  Jacqui’s education debt remains the highest.  All debt levels would be repayable under the HECS or FEE-HELP schemes. 

  • The career pathway for each of them is now completely up to themselves. They have all meet the regulatory and education requirements of becoming a Financial Planner.  From this point onwards, they all need to ensure they meet the mandatory Continuing Professional Development (CPD) hours for the industry.

*****

Financial planning is a personally fulfilling and financially rewarding career.  Being a financial adviser combines an interest in law, with a passion for numbers, and a personal desire to help ordinary Australians understand the sometimes-complex world of finance. 

Almost every working Australian has a superannuation fund which, for many, becomes the second biggest asset over their lifetime.   Financial advice is crucial to helping people manage and maximise the benefits from this, and to provide a safety net in retirement.

The attractiveness of a career in financial planning lies in its broad societal need and beneficial impacts.  Much of what a practitioner does is centred around about helping people, based on a blend of professional expertise and common-sense.  It’s not an adversarial setting like law, and it does not involve constantly dealing with sick or injured people like medicine. It’s arguably more exciting than accounting, and as personally rewarding as teaching or nursing.

Financial planning offers excellent remuneration, the ability to be intellectually and personally challenged, great working hours, lifestyle balance, a career as a Professional, and for those seeking something more, the ability to one day start your own Practice.   When compared to other professions (such as Law, Accounting, and Medicine), financial planning offers an exceptional career on so many levels.