Insights on wealth management’s labour market 2022-2025: An industry snapshot series

In continuation of our update on unemployment and recruitment trends in 2022, we’ve expanded on our analysis to investigate trends specifically related to the wealth management industry.

A quick summary of today’s wealth management recruitment trends:

• SEEK candidate availability in banking & financial services is low today compared with the last five years
• Since late 2021, financial services salaries have grown by 4.0%
• Sectors with the largest salary increases include client services, financial planning, and mortgages
• Between 2022 and 2025, professional occupations will see the largest growth at 14.7%, whilst clerical and administrative occupations will see lower growth of 3.9%
• The Australian financial services industry will grow from 490,500 people in 2021 to 518,800 in 2025

Our earlier update outlined how employers will continue to experience talent shortages for at least another two years before market conditions improve. Along with candidate shortages, there are facts specific to the wealth management employment market that financial services businesses should consider when structuring their workforce.

Demand for wealth management skills and occupations

The National Skills Commission has identified four of the major skills that will be required in the future, and summarised them as the ‘Four Cs’ . These include:

• Care skills, which respond to health and demographic changes
• Computing skills, referring to specialised technical skills that are required to respond to digital advances
• Cognitive abilities, including advanced reasoning and higher-order skills that cannot be replaced by automation
• Communication skills, which are required for collaboration and engagement within and across workplaces

Due to high demand for candidates who possess the above skills, financial services positions such as client services, broking, advising, and risk assessing that require these skills will be the most difficult to recruit for over the next three years.

Business and operations skills

Demand for skills from the ‘business operations and financial activities’ family is projected to grow at 5.6%, slower than the average of 7.8%. Within this skill family, the skills with the lowest projected growth are common to clerical and process roles, which are highly automatable. For example, ‘verify and maintain financial records’, which is only projected to grow at 2% over the next three years.

Despite the slower-than-average growth in this skills family, significant growth is projected in skills within the family that require higher-order strategic and planning skills, including:

• Establish organisational policies or programs (11%)
• Operational specifications design and reporting (13%)
• Develop business or market strategies (11%)
• Identify and recommend investments to clients (9%)

The ageing population drives demand for superannuation and financial planning

The superannuation and financial planning sectors will see a large increase in demand due to Australia’s ageing population, both in the medium and long term.

The superannuation sector will be impacted by demographic changes as a larger proportion of Australia’s population reaches retirement, and as a result, the proportion of superannuation assets held in the retirement phase increases. Demand for superannuation employees that understand the needs of clients in retirement will grow, and additional training should be invested into the existing superannuation workforce to allow employees to better assist the ageing clientele.

The ageing population is also predicted to drive demand for self-managed superannuation funds (SMSFs). As a result, the requirement for an advisory role in superannuation will increase, and the requirement to manage funds on a member’s behalf will decrease.

The financial planning sector will grow as mature Australians seek professional financial advice for their retirement. Post-retirement wealth is also increasing in Australia, meaning a larger proportion of retirees will have the incentive to seek professional advice. In financial planning, the ability to assist clients through their retirement will be highly sought after. Candidates in this sector with specialist knowledge to assist retirees and strong communication, relationship-building, and risk-management skills will be in high demand.

Hybrid work arrangements will attract top talent

72% of Australian workers prefer a mixture of in-person and virtual work, and a further 19% would prefer to work completely remotely. Along with this, only 10% of Australian workers are willing to work from the office 100% of the time. With low candidate availability in all financial services sectors, it is essential to offer at least some level of remote work to stay competitive.

However, research from McKinsey Global Institute found that whilst most tasks do not result in a loss of productivity when done from home, tasks that involve selling and influencing others are less productive when done remotely. As a result, certain wealth management tasks that involve meeting with clients will be more productive when done in person.

To find the medium between productivity and employee preferences, offer hybrid working arrangements to your employees. Ask your employees to attend client meetings and team activities in person but offer them the flexibility to complete other tasks from home, which will have no impact on their productivity.

To find out more about the wealth management labour market between 2022 and 2025, and how you should structure your business with these insights in mind, fill out the form on this page, and one of our specialist consultants will be in touch.

Sources: SEEK, SEEK Industry Insights Banking & Finance, 2022; National Skills Commission, Projecting employment to 2025, 2022; McKinsey & Company, What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and nine countries, 2020; Australian Industry and Skills Committee, Financial Services, 2022.