By Lauren Eardley
As a Specialist Recruitment Consultant in the Finance and Credit space, I am always looking for opportunities to become more immersed in the industry. Recently I attended the AB+F Retail Credit Panel Discussion which was held in light of the changes to Credit Reporting introduced in Australia in March 2014.
If you are unaware, this legislative change means that more credit information can now be shared by lenders for the purpose of assessing credit. Before now the information that could be shared was limited to credit applications and defaults (i.e. negative credit reporting), however the change in legislation means additional information will be available on accounts that customers currently have and how well they meet their repayments (i.e. positive/ comprehensive credit reporting). This brings Australia in line with the majority of other OECD countries including the US, UK and New Zealand.
The AB&F Discussion Panel was made up of 4 key players in the Global Credit Space: David Grafton (Credit Risk & Advisory Services, Veda), Bart Hellemans (Chief Risk Officer, ING Direct), Adam McAnalen (Head of Retail Credit, BOQ) and Cln Murthy (Country Risk Director – Consumer, Citi). Questions came from Andrew Stabback, Publisher & Managing Director of AB+F and the audience.
There was undeniable agreement that this is a busy time for Credit and Risk Managers and this period of transition is an opportunity for organisations to really switch on to data sharing and make the best of it.
The Credit Industry is buoyant and is growing for both secured and unsecured products however it still remains a relatively flat portion of Australian GDP. The panellists analysed the contribution of the buoyant housing market on (secured) credit growth. It was concluded that the current housing market is making the mortgage space highly competitive; lenders are having to differentiate themselves in the market place whilst not impacting their risk appetite. This means below average interest rates therefore people are paying off their mortgages much faster. Murthy of Citi confirmed that this translated into unsecured products as well; credit cards and personal loans are being snapped up, however consumers are paying them off quicker which means the growth is not being reflected on the balance sheet.
Hellemans and Murthy representing banks with global coverage agreed that we are not quite clear of the GFC yet but we are certainly in a stronger position now than in 2007. The regulations which instigated in the last 2 years have subdued credit growth. The increase in data available due to CCR means that institutions can delve into more niche markets and develop new products to differentiate themselves in the market place.
One example from the UK was raised; a Credit/Debit combination card with which you deposit a small amount of cash then the credit portion increases in line with how well you make repayments.
Sitting in a room full of Senior Credit and Risk Managers, they were all pretty much on the ball with the changes and how it affected their organisations. However, to really see the positive effects of CCR implementation, consumers (i.e. the general public) also need to understand what information is available on them, how it will be used and how it affects them. David Grafton, Executive General Manager, Credit Risk and Advisory Services at Veda, said it was frustrating to see consumers left largely unaware of their important new rights in the credit reporting system, that will ultimately help them take better control of their credit history.
“I think the government has really abdicated an important responsibility in that this is the most important change in privacy law in 25 years and it affects each and every one of us, it really does,” Grafton said.
This could potentially ensue a shift in purchasing power to consumers within 3-5 years. If customers have a positive credit file and are aware of it, it allows them greater negotiation power when obtaining credit. It will also allow consumers who have a made a genuine mistake in their payment history to accumulate a positive credit score more quickly and borrow successfully again in the future.
The changes following the implementation are in their very early days and we are not likely to see major changes for several years. The credit industry is encouraged to embrace data sharing sooner rather than later to avoid risk of irresponsible lending. While experience in application of CCR overseas can be drawn upon, Australia has different dynamics and is untested so beyond speculation the future of the Credit Industry has a long way to go and remains to be seen.
As a Specialist in Finance Recruitment, I screen hundreds of resumes a day from people looking to break into the Banking and Finance industry. My inspiration for this blog comes from a trend I have noticed recently. That is there has been a significant increase in the number of people looking to break into one specific area: Financial Planning.
The RG146 qualification has become more prevalent on resumes even for applications to roles which are not related to Financial Planning. This inspired me to uncover my candidate’s motivations and understand; what is so attractive about Financial Planning?
The vast majority of candidates I speak to are recent graduates in the field of Business, Commerce, Finance or Accounting. Financial Planning is one of many paths that a graduate from these subjects can choose to go down. Based on my research and insights, a candidate’s attraction to Financial Planning can be summarised into three main points:
• An opportunity to use their degree and pursue their field of interest
• Personal Financial reward
• The opportunity to directly help people with their financial goals
So how fulfilling is Financial Planning in reality? I spoke to Bill Gilroy, Ryan Sparks and Gabrielle Bell of Ipac Securities to get the inside story on how to get into Financial Planning and what to expect.
Both Ryan and Gabrielle are relatively early in their Financial Planning careers; they both studied Business and Commerce at University and were successful in gaining experience from a graduate program: one with Macquarie Bank and the other with Dixon Advisory. Their initial attractions to the industry were much the same as those of most of the candidates I spoke to; with the main motivation being the opportunity to help people. Working with Ipac securities has given them firsthand experience of Financial Planning beginning with a specialism and more recently branching out into more holistic advice.
They advised that the type of Financial Planning you go into depends on your own choices and the type of firm you work with. You could specialise in a certain area of advice such as investments, insurance, retirement preparation, tax management or Self-Managed Super Funds, or offer more holistic advice. There is a stigma that Financial Planners are all about sales however the recent FoFA legislative changes which came about mid-2013 have meant enhanced clarity on charges for advice and products. This has put greater emphasis on Financial Planners actually helping their customers achieve their financial goals rather than product placement.
As a Financial Planner, the salary and bonus structure can vary dependent on the company you work for. Some Financial Planners receive a base salary with a modest incentive structure others will place more emphasis on a generous commission structure. Both create very different cultures within a firm so make sure to find a structure that matches your motivations.
Gabrielle and Ryan’s best bits of the job were centered around engaging with people and using their privileged position to be able to understand their situation and provide a solution. They both enjoy the personal aspect of the role, being empathetic to a client’s needs but remaining professional. They have flexible working arrangements and are happy with their remuneration structure.
Any negatives? Pressure; being responsible for a client’s finances, particularly following a redundancy or the loss of a loved one can be intense. It is important to maintain an emotional distance from a client’s situation and provide impartial advice.
Overall the expectations and reality explored for this article were closely matched. Working as a Financial Planner is rewarding. This comes with a caveat however; the industry is broad and there are a wide variety of firms out there all operating in very different ways, with different salary structures, cultures, specialisms and motivations. It is up to you to work out where your strengths and motivations lie to allow you to become the most successful Financial Planner you can be.
Coming out of one of the busiest Januaries I have experienced in the recruitment industry, I feel compelled to share some of my findings on the early part of 2014. As a dedicated Finance & Credit Recruitment Consultant; my findings will be biased towards this sector.
I was one of those lucky people to work straight through the Christmas period so I rode out the quiet days and clung on during the January surge. Whether it be a trend in just my own clients or a reflection of the market as a whole, there has been a definite increase in demand for experienced Analysts, Collectors, Business Development Managers, Credit Controllers and Support Staff across the Finance industry. I believe this trend is linked to the ‘non-bank’ smaller lenders making an aggressive push to take market share in lending; particularly on home loans. Borrowers who may have been disenchanted with ‘non-bank’ lenders since the GFC have increased their confidence and in some cases have turned away from banks due to their higher interest rates and increased lending criteria. This has meant a requirement for more staff for these businesses and an increase in jobs. This demand has subsequently been reflected by an increase in quality candidates looking to snap up the best jobs out there this side of Christmas (up 8% on January 2013). This is great for employers, however; more opportunity means more choice and competition for candidates.
The choice that strong candidates have in this market has created the ability for them to demand more money; and trust me they are! Depending on your budget requirements and flexibility you may or may not be able to meet these demands but I have certainly witnessed my clients in this market becoming more generous in their salary provisions so it is certainly something to consider if you wish to compete strongly for the best talent.
I have also noticed a certain ferocity in the competition for these strong candidates in credit and finance this year. A great candidate is always interviewing for several positions at once and they have varying levels of honesty in describing yours as their ‘Number One Priority.’ This creates an obligation on the employer to differentiate themselves from their competitors on what matters most to a superior performer; the benefits. Now this varies from person to person, salary is of course the most obvious point of differentiation but I have also witnessed an increasing emphasis on finding ‘The Right Role;’ this comes down to something less tangible; Culture.
The culture of an organisation comes down to a few fundamental points: management, team involvement, rewards, recognition and performance monitoring. While it is easy to stick an extra few Ks onto the salary, these cultural points are less easy to address (at least in the short term).
The length and smoothness of the recruitment process is also an initial indication to the candidate of the culture of the business. If the process is long and arduous and the hiring manager is taking 2 months to make a decision, this reflects poorly on the company and its brand; it is not a good look. And in this market where superior performers are available for no longer than 72 hours, I highly recommend moving quickly.
I am more than familiar with the hoops that candidates have to jump through to get their foot in the door with financial institutions and alike: multiple interviews, psychometric tests, skills tests, background checks, yet another interview and I certainly understand the value of each and every step. The onus is therefore on the hiring manager to move the candidates quickly through each stage and for the recruiter (i.e. yours truly) to keep the candidate motivated and excited about the opportunity throughout the whole process. This is where specialist recruiters can really complement internal teams and make your life a whole lot easier throughout the selection process.
If you need help harnessing and managing star candidates for your organisation, call Lauren Eardley our Specialist Finance Recruiter on 02 9221 6422.
