The inaugural SLICE financial planning survey has revealed that only 9% of respondents thought that the introduction of FOFA has negatively impacted on their business growth in terms of staffing and while 25% were unclear of the ramifications of the legislation in follow up discussions most suspected there would be some increase in costs to their businesses but they thought that this will have little or no impact on employee numbers.

25% of respondents expect FOFA to have a positive effect, leading to more employees in their businesses. Others commented that although complying with FOFA requirements will not lead to them hiring more employees, it has meant more work for the existing employees.

14% who responded ‘Other’ focused on the increase in workload within their businesses due to the implementation of FOFA but most indicated that they are looking for this to be undertaken by existing staff. It was thought that this increase while resulting in some cost to their businesses shouldn’t impact on employee numbers. However, one respondent made the comment that ‘costs will increase and productivity will decline’.

In follow up discussions with a number of respondents it was found that those who thought there was no impact or the impact was marginal all had put in place measures to meet the requirements of the legislation well in advance of its enactment. As one business owner said “The industry has had more than adequate time to get ready for FOFA and those that are struggling now should have taken the necessary steps to get their businesses ready”.

Employee numbers

68% of financial planning businesses either maintained or decreased employee numbers in 2013 while 32% increased their headcount. Of those businesses that recruited employees 35% were for replacement positions while 29% were for new positions as a direct result of business growth.

The new positions included traditional financial planning roles plus marketers, business coaches, accountants and lawyers. One business owner commented that although FOFA had little impact in terms of workload, they will be increasing employee numbers due to increased business, including bringing some work they outsourced during the GFC back in house.

Recruitment methods

When it comes to recruiting employees, the overwhelming number of respondents (70%) DIY while 13% use specialist recruiters who have a track record of recruiting for financial planning businesses. 8% draw on an HR resource and 5% on their licensee for support.

Cost was cited as a significant issue with recruiter’s fees being seen as prohibitive. However when asked how much time they had to allocate to the DIY process and the costs associated with that none had costed their time and the cost of the business’s resources in the recruitment process.

As one respondent said “Recruiting staff is something I have to do but I’ve found it frustrating. I start out talking to colleagues and if they don’t have any leads I advertise on SEEK but quite often you get a lot of people applying who haven’t the experience or the skills”.

55% of respondents will call on industry colleagues for leads while 54% use employment websites. 18% draw on social media in their recruitment campaign. When asked how they use social media in follow up discussions most said that they mainly use LinkedIn and to a lesser extent Facebook and that was mainly to check out candidates they were considering rather than sourcing them from these websites.

Financial planners are also becoming more creative in their efforts to find good candidates, including advertising on university websites, working with local high schools and university career services and acting as mentors in formal mentoring programs.

Employee screening

Most financial planners (79%) said they always conduct reference checks. When asked in follow up conversations what kind of checks they conducted 65% said that they conducted a formal reference check with a list of prepared questions with the remainder saying they did informal checks with no or few prepared questions. All said that they always spoke to the previous employer and sixty per cent spoke to the manager that the employee reported directly to.

One respondent commented “I always carry out two reference checks and make sure that I speak to the people that the person reported to as then you know they have had a lot to do with them on a day to day basis and can give you a an accurate view as to their capabilities and performance in their previous roles”.

58% of respondents used behavioural profiling however it depended on the nature of the position in terms of role responsibilities and seniority. 21% always used profiling. One respondent commented “I had a situation where I had two great candidates for a client service role and so I used a profiling assessment. It made the decision so much easier to assess how each would not only be suitable for the role but fit in to our team”.

64% of respondents stated that they didn’t use IQ tests with 27% saying they do but not always and 9% said they always use them.

Knowledge based tests were used by 81% per cent of respondents with 20% stating that they always use them.

Training

When asked about their training budgets 50% said that they had in 2013 increased their budgets while 34% reported no change and thirteen per cent had reduced their budget.

When asked in follow up conversations where the increases were targeted respondents said it was focused on up skilling employees in the use of the client service and administration functions and resourcing compliance.

One respondent commented “Training is an investment in our business. If we aren’t up to scratch on how we service our clients then we’re not doing our jobs. It is also important for our staff to know that we are interested in them getting the most out of their jobs and they are equipped to deliver excellent service to our clients. We run a staff satisfaction survey and every time it comes back with a strong endorsement of staff of our training programs.”

Concluding remarks

Controlling business costs and having a competent team in place were recurring themes that ran through the SLICE Survey.

While there was concern expressed in both the Survey and follow up discussions about an increase (or anticipated increase) in costs with the implementation of FOFA, a significant proportion of respondents stated that they would be able to absorb the workload through their existing staff rather than recruit new employees.

Recruitment was the second area of concern with most businesses preferring to DIY and found going it alone a ‘hit and miss’ experience. However, no one who chose this route had worked out what it cost their business in terms of their time or that of their staff.

Even in this cost sensitive environment there was recognition by businesses that they are reliant on their staff to deliver client outcomes and ensure they are fulfilling their requirements under FOFA and the reported increase in training budgets is a reflection of this.

Respondents to the SLICE survey

71% of respondents are in businesses that have been operating for more than ten years with 11% operating for six to ten years.

77% of respondents are in businesses with up to ten employees with 23% having between six to ten employees and 54% having between one to five employees. 16% of those surveyed were from businesses with more than twenty employees.

The post Less heat in FOFA, employee numbers static, focus on training – results of the SLICE survey appeared first on AdviserVoice.