Skills and attributes required of a successful Financial Planner

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Skills and attributes required of a successful
Financial Planner

• Beverley Jackling,
• Associate Professor
• School of Accounting, Economics Finance,
• Deakin University
• and
• Colin Sullivan ,
• Head of Operational Risk Compliance,
• Markets,
• ANZ

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Objectives of the study

• Examine the competency standards considered to be
  most important for financial planners
• Report on gaps in standards displayed and
  standards expected

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Significance of the study

• Adds to sparsely researched field of financial
  planning.
• Tests the applicability of Birketts theoretical
  framework for competencies of financial planners.
• Provides feedback to the industry about the
  strengths and weaknesses of educational programs.

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Milestones in the Financial Planning Environment
in Australia
1991 Compulsory
Superannuation
1992 3-4 SGC
(Dependent on company payroll)
1996 Howard Government elected
Wallis Inquiry established
1998 CLERP 6 (outcome of Wallis
Inquiry) ASIC Established
2002 FSRA Phase 1 (implementation
in 3 phases to 2004)
Industry reform driven by regulator desire to
protect consumers/retail customers
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The changing risk appetite of investors in
Managed FundsSeptember 1990 - June 2006
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Background to educational requirements for
Financial Planning
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Birketts taxonomy of attributes of financial
planners
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Educating financial planners issues identified
in literature

• Difficulty in teaching generic skills in formal
  education (Goetz et al. 2005)
• Lack of evidence that generic skills taught and
  assessed in educational process (Christainsen
  De Vaney, 1998)
• Communication skills poor for U.S. finance
  graduates (Graham Krueger, 1996)

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Education including generic skills

• Can educators teach generic skills?
• Clancey and Ballard (1995) at best guarantee the
  opportunity to learn and develop generic skills
• Cranmer (2006) academic efforts to teach generic
  skills not succeeding.
• Alternative divert resources to
  employment-based training

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Evaluation of competencies of financial planners
shadow shopping ASIC/ACA

• Technical skills
• ASIC (2003) deficiencies in technical (cognitive)
  skills linked to commission driven product
  selling.
• Generic skills lack of communication skills
  e.g. explanation of investment risks,
  comprehension of plan, failure to identify key
  client requirements.

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Research Questions

• Based on Birketts taxonomy, which skills do
  financial planners perceive as important?
• How do financial planners rate the standard of
  technical and generic skill acquisition of newly
  appointed financial planners?

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Research Approach

• The Questionnaire
• Assessment of importance of generic and cognitive
  skills
• Feedback on gaps in skills of new graduates
• Sample
• FP website for addresses of financial planners
  around Australia.
• 162 useable responses

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Table 1Responses n 162
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RQ1 Importance of skills
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RQ2 Gaps in skill importance and skill displayed
n82 All paired t-tests on the difference
between important and exhibited means were
significant except numerical skills
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Conclusions

• RQ1 Listening skills ranked as most important
  generic skill
• Most important cognitive skill ability to
  conduct financial analysis
• RQ2 Greatest gaps in skills listening and
  questioning skills.

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Implications and further directions

• Need to re examine existing programs to more
  specifically address gaps in skill development
• experiential programs in undergraduate studies
• Cranmer (2006) structured work experience and
  employer involvement in degree course design and
  delivery

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Implications and further directions

• Incorporate listening skills into programs
• The doctor/patient planner/client similarity.
• The task how to effectively incorporate skill
  development into existing educational programs.

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Conclusions

• Despite enormous progress of the financial
  planning) profession in the last 40 years much
  needs to be done to improve the quality of advice
  through research and education Warschauer (2002).

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