Financial
Contents
1. Executive summary
2
2. Industry intelligence
6
3. Identified workforce development needs
24
4. Current impact of training packages
28
5. Future directions
36
Appendix A - Methodology and bibliography
40
Appendix B - Financial Services Occupations in demand
46
Appendix C - NCVER data
50
Appendix D - Financial Services Skills employment profile 58
The Environment Scan
Context, purpose & audience
Continuing advances in technology and ongoing pressure on productivity are building the demand for creative and innovation skills with which workforces can use Big Data, engage with complex systems and focus on customers. With these skills Australian industry can better respond to the challenges of operating in a global marketplace.
As industries continue to evolve, converge or relocate, and as new job roles emerge and others become obsolete, developed economies are looking to ‘early warning systems’ to detect the onset of economic and industry trends. The Environment Scans – or Escans – undertaken annually by Industry Skills Councils report these trends and assist governments and industry to shape responsive vocational training systems.
Specifically, Innovation and Business Skills Australia’s (IBSA) Escan identifies the factors currently having impact on the skill needs of the workforces of its six industries and considers how well the national training system, its products and services, and industry itself are responding.
National, real time industry intelligence is what sets the Escans apart from other reports on the national training system. The Escans capture data and information from IBSA’s ongoing visits and conversations with key industry
the people doing the jobs across the industries and who experience firsthand the impact of change. It also draws on a range of topical sources such as the latest industry, enterprise and government research, and international developments. The Escan methodology can be found at Appendix A.
The Escan’s formal audience is the Department of Education and Training – both to contribute to industry skills needs advice and also as evidence to support endorsement of training package upgrades. The relevance of the Escan however extends far beyond and continues to be used extensively by state and territory governments, industry bodies, enterprises and many other stakeholders involved in skills and workforce development.
As a document limited in size, the Escan does not seek to capture every issue within each industry, rather it is a snapshot of a continually developing picture that is intended to alert and inform a wide audience and enhance their capacity to act.
The Escans are part of Industry Skills Councils’ broader role in gathering industry intelligence and undertaking high quality analysis of the skills needs and profile of current and future industry workforces. Escan 2015 has been produced with the assistance of funding provided by the Australian Government through the Department of Education
CHAPTER 1
Executive
summary
CHAPTER 1
Executive summary
The Financial Services Industry covers the full array of money management services including
banks, building societies and credit unions, insurers, superannuation providers, fund managers,
accountants and bookkeepers, financial planners and advisers, debt collectors, financial markets,
personal trustees and credit agencies.
For the year to December 2013, the Financial Services Industry was the second biggest contributor to national output, accounting for 8.6 percent of gross value added by industry, only slightly behind mining at the time at 10.7 percent, and ahead of other high value-adding industries, such as construction and manufacturing. The Financial Services Industry is the largest contributor to the services sector, which accounts for around 80 percent of real gross value added.1 Australia has a sophisticated
financial sector that offers access to the world’s third largest pool of investment funds ($1.62 trillion) as well as one of the region’s largest pools of bank assets. The industry has been through a tumultuous period over the last few years. Pressures of the global financial downturn was quickly followed by a raft of regulatory reforms designed to safeguard consumers – many of which are still being rolled out. Efforts to professionalise parts of the industry, along with competition internationally and between different
1 Austrade (2014) Why Australia: Benchmark Report Update June 2014
sectors in the industry, have led to structural change. Technology advances are affecting this industry more than most others and the government led inquiry into the financial system, which reported late in November 2014, made recommendations in five areas heralding further change for financial services businesses:
• to strengthen the economy by making the financial system more resilient
• lift the value of the superannuation system and retirement outcomes • drive economic growth and
productivity through settings that promote innovation
• enhance confidence and trust by creating an environment in which financial firms treat customers fairly, and
• enhance regulator independence and accountability, and minimise the need for future regulation.2
2 Commonwealth of Australia/Murray, D et al, Financial System Inquiry report, November 2014
INDUSTRY TRENDS
The shape and health of the Financial Services Industry is being affected by these key trends:
•
Policy and regulation changes
– a fluctuating regulatory environment as a result of changes in government and new proposals arising from the Financial System Inquiry, as well as increasing regulatory requirements and reform following the global financial downturn and recent investigations into the financial planning sector.•
Technology transformation
– technology developments that include the increasing availability of large volumes of customer data, mounting rates of cybercrime and lastly growth in mobile services and payment systems.
•
Changing customer needs and
expectations
– demographic and technology changes bringing demands for new products and services, along with increasing complexity in customer interactions.•
Social investment and climate
change
– increasing interest in social investment and integrating information on climate risks into various social products.WORKFORCE
DEVELOPMENT
CHALLENGES
Workforce development challenges arising from these and other trends, for which further detail is included in Chapter 3 include:
• Strong leadership and management
• Increased focus on regulation and risk management
• Cultural competence
• Versatility combined with commercial acumen, and
• The emerging autonomous worker.
IMPLICATIONS FOR SKILLS
DEVELOPMENT
Skills that financial services organisations need from employees in the immediate future and that require particular attention from the VET sector (detail is provided in
• Compliance and risk management skills • Data analysis skills
• Leadership and management skills • Diversity management skills • Customer service skills
• Skills in expanding specialities: disability insurance, retirement products and anti-money laundering and counter-terrorism financing • Training package linkages with
other industries, and
CHAPTER 2
Industry
CHAPTER 2
Industry intelligence
THE FINANCIAL
SERVICES INDUSTRY
The Financial Services Industry covers the full array of money
management services including banks, building societies and credit unions, insurers, superannuation providers, fund managers, accountants and bookkeepers, financial planners and advisers, debt collectors, fund managers, financial markets, personal trustees and credit agencies.
The industry has been through a tumultuous period with the pressure of the global financial downturn quickly being followed by a raft of regulatory reforms designed to protect consumers, many of which are still being rolled out. Efforts to professionalise parts of the industry along with competition internationally, and between sectors of the industry, have led to structural change. Technology advances are affecting this industry more than most others and the government led inquiry into the financial system, which reported late in November 2014, made recommendations in five areas heralding further change that will affect financial service businesses:
• strengthen the economy by making the financial system more resilient • lift the value of the superannuation
system and retirement outcomes
• drive economic growth and productivity through settings that promote innovation
• enhance confidence and trust by creating an environment in which financial firms treat customers fairly, and
• enhance regulator independence and accountability, and minimise the need for future regulation.
Despite the ongoing reshaping, the industry is in good shape. For the year to December 2013, the Financial Services Industry was the second biggest contributor to national output, accounting for 8.6 percent of gross value added by industry, only slightly behind mining at 10.7 percent, and ahead of other high value adding industries, such as construction with eight percent, and manufacturing at seven percent. The Financial Services Industry is the largest contributor to the services sector, which accounts for around 80 percent of real gross value added. Since 1992, the Financial Services Industry has recorded the second highest annual growth of all industries, in terms of gross value added, expanding by an average of five percent per annum compared with 3.6 percent per annum for all industries;3 see Figure 1.
3 Austrade (2014) Why Australia: Benchmark Report Update June 2014
Australia has a sophisticated financial sector that offers access to the world’s third largest pool of investment funds ($1.62 trillion) and one of the region’s largest pools of bank assets. According to the 2014 World Competitiveness Ranking, Australia has one of the lowest financial risk factors in the world and has the fourth highest ranked finance and banking regulatory system. In 2012, the World Economic Forum ranked Australia fifth out of 62 financial systems. Australia was also ranked fifth for non-banking financial services and achieved solid scores in overall financial access (sixth), banking services (seventh), financial markets (eighth) and financial stability (ninth).4
There is significant variation in the size of the sectors within the industry. Figures 2 and 3 show how superannuation funds, banking and insurance dominate the industry’s revenue base. However, many of the smaller sectors are still reasonably high earners for the economy, relative to most other industries.
While the aftermath of the global financial downturn is still affecting the Financial Services Industry in Australia, the future looks brighter with modest industry growth expected over the next five years. Cautious investor behaviour, the slow recovery in non-mining sectors
4 Austrade (2014) Why Australia: Benchmark Report Update June 2014
Construction Financial and insurance services Professional, scientific and technical services Information media and telecommunications Health care and social assistance Mining Wholesale trade Transport, postal and warehousing Retail trade Administrative and support services Arts and recreation services
400 350 300 250 200 150 100 50 0 25 20 15 10 5 0
Source: Australian Bureau of Statistics, Cat. No. 5206.0 – Australian National Accounts: National Income, Expenditure and Product, December 2013, Table 6. Gross Value Added by Industry, Chain Volume Measures (released 5 March 2014); Austrade.
Figure 1:
Australia’s real gross value added – growth by industries achieving above average growth ($b)
Figure 2:
Financial Services Industry revenue, 2013-14: Large sectors ($b)
Source (Figures 2 and 3): IBISWorld Industry Reports 2014: K6221A National and Regional Commercial Banks in Australia; K6221B Foreign Banks in Australia; K6222 Building Societies in Australia; K6223 Credit Unions in Australia; K6310 Life Insurance in Australia; K6321 Health Insurance in Australia; K6322 General Insurance in Australia; K6240 Insurance Brokers in Australia; K6330 Superannuation Funds in Australia; K6411A Investment Banking and Securities Brokerage; K6411B Mortgage Brokers in Australia; K6229A Money Market Dealers
Figure 3:
Financial Services Industry revenue, 2013-14: Small and medium sectors ($b)
Construction Financial and insurance services Professional, scientific and technical services Information media and telecommunications Health care and social assistance Mining Wholesale trade Transport, postal and warehousing Retail trade Administrative and support services Arts and recreation services
0.0 1.0 2.0 3.0 4.0 5.0 6.0 5.1 5.0 5.0 4.9 4.3 4.2 3.9 3.8 3.8 3.6 3.5 400 350 300 250 200 150 100 50 0 Banking Insurance Superannuation 25 20 15 10 5 0 Financial
of the economy and a potentially overheating residential property market will be some of the main issues facing the industry beyond 2014.5
Virtually all households and
businesses consume financial services, so the location of businesses tends to correspond to population hubs. For services such as banking there is a slight bias towards the less populated states and territories because more branches per capita are required to service a more dispersed population. However, services such as insurers and funds managers do not have extensive branch networks and tend to have their major offices located in the financial hubs of Sydney and Melbourne. Consequently, NSW and Victoria have a larger share of these types of businesses.
The Financial Services Industry is highly regulated and in recent years has been subject to intensified regulatory requirements. Regulatory changes can have a pronounced impact on demand for services and
5 IBISWorld (2014) Finance in Australia industry report K6200
industry dynamics. Future of Financial Advice (FOFA) reforms, first introduced in 2012, have been undergoing amendments, with the final shape of the legislation still unclear, as the balance between minimising regulatory burden for the sector and improving trust in the sector, and protection of consumers, is debated within the community. Other new regulations will come into effect over the next five years, that are aiming to address depositors’ security concerns, and that may affect bank profitability.
Businesses in this industry are strongly affected by technology change. Deloitte Access Economics estimates that 65 percent of Australia’s industries are going to experience significant disruption from digital technology in the next five years, with the Financial Services Industry near the top of the list. Financial services need to be effectively integrating key digital processes, including the Cloud, mobile payment systems, social networks, data and analytics and cybercrime6
while, at the same time, preparing for the impact of a range of emerging
6 Hillard, R. (2013) Banking technology trends 2013
technologies such as wearable devices and new currencies.7
More detail on the products, services and outlook for each of the financial services sectors is outlined below; the data is drawn from the latest IBISWorld industry reports, unless otherwise referenced.
Superannuation
The superannuation sector has two components – the superannuation funds that provide retirement benefits to members and the superannuation funds managers who provide investment management, administration and advisory services to the superannuation funds. There are currently 324 super funds in Australia that have more than five members, and close to half a million self managed funds. There are 710 superannuation funds management businesses. The products and services segmentation for funds is illustrated in Figure 4.
7 Jacobs (2014) Five emerging technologies that will transform financial services
Figure 4:
Superannuation funds products and services segmentation, 2013-14
Source: IBISWorld (2104) K6330 Superannuation funds in Australia Industry Report
Small funds Retail funds Industry funds Public sector funds Corporate funds Other
20%
26%
31%
16%
4%
3%
Improved economic conditions and revenue growth from a stronger economy and increases in the Superannuation Guarantee from 9.5 percent in 2014 to 12 percent in 2019, will add to the value of superannuation with benefits flowing on to funds managers.
As of 31 March 2014, the
superannuation sector held $1.8 trillion in assets. Industry revenue was forecast to grow by 46.6 percent in 2013-148
and Industry Super Australia projects that superannuation assets will exceed those of the banking sector by the early 2030s. This will make it a critical sector in terms of funding Australia’s economic activity.9
Regulatory changes, particularly the introduction of Stronger Super Reforms in 2013, have caused the number of major funds to fall, with other funds having merged to realise cost efficiencies and lower fee structures. Meanwhile, self managed super funds continue to flourish as more people decide to take control of their retirement savings. This trend is a challenge for the super funds management subsector, which will now need to market their
8 ; K6330 (2014) 9Superannuation Funds in Australia
services to Self Managed Super Funds (SMSF) trustees and administrators. Superannuation company CEOs have said that the top three strategic priorities for 2014-2016 are:
• member engagement • operational efficiency, due to
concerns that new regulations will lead to increased operating costs, and
• post retirement products.10
Increasing member engagement will require a workforce with strong communication skills that can operate effectively in the online world. Keeping costs down will require an efficient workforce that makes best use of data and other technology. The aging population means funds and funds’ managers will need to design and understand a range of post retirement products and have the financial analysis skills to determine what is the most appropriate product to maximise individuals’ outcomes.
Banking
The banking sector includes domestic banks, foreign banks, credit unions
and building societies. Home loans, business loans and personal loans are the major activities of this sector. Revenue is raised from interest on loans, fees and commissions. The sector also offers deposit and transaction products and many of the larger banks offer wealth management services, including superannuation and investment advice. The products and services segmentation for the largest banking subsectors is provided in Figure 5.
Technology is having an enormous impact on the banking sector, with the development of new internet and mobile banking features and the automation of many functions. The rise of online banking has seen the branch networks shrink for the first time in eleven years, however employment of bank workers is expected to continue to grow, albeit at a slower rate. Continued focus on customer satisfaction and loyalty is expected to be a key to success in growing markets, particularly in the wake of government reforms to promote competition in the sector. In the longer term, banks will have to look for strategies to adjust to the changing structure of the Australian financial system. In particular, growth of superannuation as a source of long term funding could result in the big four losing their share of the mortgage lending market.
Figure 5:
National and regional commercial banks products and services segmentation, 2013-14
Source: IBISWorld K6221A National and regional Commercial Banks in Australia Industry Report
Home loans Business loans Personal lending
Bank accounts and transactions
36%
57%
5%
Insurance
The insurance sector is made of four main segments:
•
General insurance
– covers loss from events such as car accidents, floods, break ins or malpractice; the sector includes workers compensation and personal injury insurance•
Health insurance
– covers hospital, medical, dental, pharmaceutical and funeral expenses•
Life insurance
– provides money in the event of an individual’s death, disablement or serious illness, and •Insurance brokers
– act asimpartial agents in selling insurance policies and also often provide risk management and other related services.
As illustrated in Figure 6, the largest sector, in terms of revenue, is life insurance followed by general insurance.
In the next five years, better conditions are predicted for most sectors. Health insurance and insurance brokerage are looking brightest owing to a better investment environment, greater demand for insurance, higher premiums and, in the case of brokers, expansion into risk consulting, advisory and support services. General insurance will
continue to grow, but more modestly. Life insurance revenue is expected to decline due to a strong run prior to 2013-14.
An analysis of insurance industry trends to 202011, highlighted the issues likely
to impact the sector in coming years: •
Online environment
– internet,mobility and social networking have created a new generation of customers who demand simplicity, speed and convenience. Customers may be more willing to buy direct using their online and offline trust network.
•
Data
– historically, the insurance sector has primarily used internal data in a structured format to make tactical and operational decisions. However, in the next decade the industry will increasingly use large amounts of real time sensor data, unstructured data from social networks, and multimedia data such as text, voice and video. The trend towards individualised risk based pricing is growing as firms develop more sophisticated analytical techniques. Insurers who fail to use better information to differentiate risk will be more likely to acquire higher risks, while more sophisticated competitors will attract11 PWC (2012) Insurance 2020
lower risks at lower prices.12
•
Natural events
– the severity and frequency of catastrophic events is increasing. Over the next decade the insurance sector could be overwhelmed with catastrophic events reducing capacity and raising prices. Or, alternatively, new sensing and monitoring technology, together with risk transfer mechanisms, could cushion insurers against abnormal losses. •Emerging economies
– asconsumption increases in emerging economies, the insurance market is expected to grow, resulting in big opportunities for Australian insurers. A recent review of life insurance by ASIC found that the industry needs to work on delivering consistently better outcomes for consumers. A range of recommendations have been made aimed at improving the professionalism of the industry to ensure client interests are met, including balancing the issue of affordability versus cover.13
Financial markets
The financial markets are a mix of subsectors primarily engaged with
12 Murray (2014) Financial Services Inquiry Interim Report
13 ASIC (2014) Higher standards needed for life insurance industry
Figure 6:
Insurance sector products and services segmentation, 2013-14 ($b)
Source: IBISWorld Industry Reports (2014) K6321 Health Insurance in Australia; K6322 General Insurance in Australia; K6310 Life Insurance in Australia; K6420 Insurance Brokerage in Australia. Life Insurance General insurance Health insurance Insurance brokers
57%
67.8%
11.8%
19.7%
investing, advising and trading within financial markets; including money market dealers, investment bankers and securities brokerage services, and funds managers. Money market dealers buy and sell short term debt, such as bank bills, and generate interest revenue. The majority of money market corporations are owned by foreign banks or securities firms. Brokerage services include trading stocks, shares or other financial assets on a commission or transaction fee basis. Investment banking activities include
corporate finance and advisory services, underwriting and principal trading. Funds managers provide portfolio investment services and investment consultant services on a commission and fee basis. Financial market dealers were severely affected by the global financial downturn. During the next five years, however, the sector is expected to fare better as the economic situation improves. The number of trades in the sharemarket will increase as stability and liquidity return.
However, demand for money market services is not expected to pick up quickly, with less dependence by corporations and banks on short term securities.
The success of financial market operators is highly reliant on the skills of its personnel. Companies need attractive remuneration packages to retain talent - employees with strong qualifications, indepth experience, good product knowledge, access to a strong research base and excellent marketing skills.
Figure 7:
Financial markets revenue, 2013-14 ($b)
Source: IBISWorld Industry Reports 2014: K6411A Investment Banking and Securities Brokerage; K6229A Money Market Dealers in Australia; K6419A Funds Management Services in Australia.
Figure 8:
Accounting and bookkeeping products and services segmentation, 2014-15
Audit services Business tax services Advisory services Personal tax services
Insolvency, reconstruction and bankruptcies Bookkeeping
15%
31%
35%
10%
4%
5%
Investment banking and
securities brokerage Fund managers Money market dealers 12 10 8 6 4 2 0
Financial markets’ employees are working within a tightening compliance environment and an expanding regional reach. They are expected to not only understand their new regulatory obligations, but also learn to instinctively apply the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence in their work. The sector could become more competitive in exports to Asia by improving the Asian-competence of its workforce, including an understanding of different cultures, languages and market nuances.
Accounting and
bookkeeping
The accounting and bookkeeping sector provides accounting, auditing and bookkeeping services relating to all areas of taxation, financial reporting and auditing. Many firms also offer business advice and assistance. There are about 32,500 businesses in the sector but four big companies dominate the industry, accounting for about 19 percent of market share. It is also important to note that the vast majority of bookkeepers in Australia are contracting businesses without employees.
In 2013 the accounting and bookkeeping sector contributed $16.4 billion to GDP.
The outlook for the sector is improving, with better economic conditions, and growing consumer spending and business confidence. The industry is projected to increase by a compound annual rate of four percent over the five years through to 2018-19 to earn $19.9 billion.
Technology will continue to have a huge influence on the accounting workforce. Data analysis is expected to be at the forefront of business plans. A recent survey by the Institute of Certified Bookkeepers shows 70 percent of respondents said they were excited about the impact of emerging
technology and changing work practices to undertake more work remotely.14
Transparency and accountability have been a focus for accountants and bookkeepers since the global financial downturn with the International Financial Reporting Standards
becoming more stringent over the next five years to improve consistency and comparability. The Australian Taxation Office is making changes to its lodgement systems to ensure that Standard Business Reporting (standard online record-keeping) will be an integral part of the business-to-ATO information exchange in the future.
14 Institute of Certified Bookkeepers (2013) Bookkeeper comparison survey
Larger players within the accounting sector are expected to benefit from continued success in the AsiaPacific and to capitalise on growth in developing nations in the region.
Leadership is a key issue in this sector; Certified Practising Accountants (CPA) Australia believes the capabilities and experience of Australian managers trail that of other countries and that Australian managers need to improve their
knowledge of international markets.
Financial planning
Financial planners or advisers prepare financial plans covering various aspects of personal and business finance which include cash flow management, education planning, retirement planning, investment planning, risk management and insurance planning, tax planning, estate planning and business succession planning.
Superannuation and retirement advice and self-managed super fund advice accounts for over half the share of sector revenue.
With the introduction of the Future of Financial Advice (FOFA) legislation from 2012, the industry has been through a turbulent period with restructuring set to continue into 2015. Issues around how professional competence can be
Figure 9:
Financial planning products and services segmentation, 2014-15
Source: IBISWorld Industry Report 2014: K6419B Financial Planning and Investment Advice in Australia
Superannuation and retirement advice Loan and investment advice
Self-managed super fund advice Other Tax advice
10%
8%
26%
21%
35%
identified and assessed are still being worked through and amendments to the legislation continue. There has been an ongoing tension between providing financial advice for the benefit of consumers and the product distribution role played by advisers.
Long term effects of the FOFA legislation are as yet unclear but it is expected that demographic trends, superannuation legislation, a rebounding economy and the complexity of the financial environment will support growing demand for financial advice. Furthermore, the FOFA changes will bring greater transparency and professionalism, which will create confidence in the industry and ultimately, it is expected, increase demand. There has been an increase in the number of people seeking financial advice around superannuation, with the ageing population and increase in super fund assets. The growth in popularity of self managed super funds presents new opportunities to this sector. Almost a million Australians are now members of a SMSF, up 30 percent from about 700,000 in 2007-08. As technology expands, investors have more tools to analyse and address their own personal finances. Planners must remain technically up to date to meet client expectations and also find ways to value add. Social media provides opportunities for planners to stay in touch with clients and build credibility. Firms have been focussing on client retention by strengthening relationships and using existing client relationships to build business; firms are looking to hold on to their experienced staff.
Recruitment trends show financial planners with proven track records and strong interpersonal skills are highly sought after and financial planners in regional and rural areas are in demand.
Credit management
This sector includes credit agencies and mercantile agents or debt collectors. Credit agents provide independent opinions on the creditworthiness of companies, individuals or securities.
Mercantile agents retrieve debt payments from individuals and businesses that have fallen short of the terms and conditions outlined by their loan agreements. Credit management firms often perform both these roles. The credit agency part of the sector is expected to grow well over the next five years with stronger economic conditions meaning credit will become more readily available and create more work. Growth will ease on the mercantile agents’ side as the economy improves but it is still expected to do well as households and businesses deleverage to reduce risks.
Data analytics is the backbone of this industry and as more financial data becomes available, operators will be looking for a workforce skilled in mathematics, finance and software for analytics to be successful.
In the credit agency subsector, wages are increasing as businesses look to hire employees with undergraduate and postgraduate tertiary qualifications. Mercantile agents are also hiring highly qualified staff with 42 percent now holding a Bachelor degree. The mercantile agents subsector has high staff turnover. Successful companies are using strategies to retain the more experienced and productive staff. Some have resorted to establishing offshore collection centres to capitalise on cheaper labour costs. Managing both internal and external human resources will be an increasing challenge for these businesses.
Mortgage broking
Mortgage brokers help borrowers in sourcing and applying for mortgage finance, for both residential and investment real estate purposes, and in refinancing existing mortgages. Because brokers represent a panel of lenders, they are able to offer their customers a range of products and tailor the mortgage to their needs. Employment in the mortgage broking sector is forecast to grow steadily over the next five years as the demand for housing finance recovers, post global
financial downturn. By the end of 2016-17 mortgage brokers are expected to be the source of between 50 to 55 percent of mortgages nationally.15
Customer service and communication and negotiation skills continue to be important. The sector relies on experienced and knowledgeable staff to effectively communicate different loan products to clients and to negotiate the best deal with lenders.
Businesses will need to embrace technology; brokers will use tools that help customers navigate information across technologies.
Mortgage managers are a growing occupation in the broking sector. Unlike a broker, the mortgage manager is responsible for the mortgage from the time it is provided by the funding institution until the borrower’s payment of the final instalment of the loan. Mortgage managers use funds from sources such as unit trusts, superannuation funds and securitised funds as well as banks.16
SMSF borrowing to purchase real estate is likely to be a huge growth area for brokers over the next few years.
Personal trustees
Trusts are owned by an individual or organisation (the trustee) but held for the benefit of other individuals or organisations (the beneficiaries). Personal trustees administer the trust according to its terms; communicate regularly with beneficiaries; and prepare required records, statements, and tax returns. This sector also includes executor services which involves managing estate assets, completing required financial returns and records and distributing the residue to the beneficiaries specified in a deceased’s will.
Trustee services are expanding their services with the ageing population expected to provide new opportunities for the sector, as generational wealth transfers.
15 MFAA (2014) Industry news, insights, stats and trends
The top four trustees and executors in Australia account for over 70 percent of revenue within the sector, with more consolidation expected to occur between establishments. Already there is greater vertical integration occurring between financial advice, trustee services and funds management. Vertically integrated companies need to ensure a shared workforce vision, culture and processes with strong links between different elements of the supply chain.
WORKFORCE
CHARACTERISTICS AND
EMPLOYMENT TRENDS
Despite its value to the economy, the Financial Services Industry only employs around 420,100 or four percent of the total workforce. Most people in the industry are employed by banks, building societies and credit unions or accountancy firms; see Figure 10.
Employment numbers have been fairly stable across the industry in recent years with growth strongest in the accounting sector and in health and general insurance. Auxiliary finance and investment services (stocks and shares trading, investment management and advisory services) dropped staff numbers in the last two years after a spike in employment in these services and banks, in 2012; see Figure 11.
The industry is growing at a moderate rate, with 20,500 new workers expected in the industry by 2018, or a projected employment growth of 4.9 percent.17 The financial services
workforce is relatively young with only 33 percent of employees over 45 years of age; this compares with 39 percent in all industries.18
17 Department of Employment (2014) Australian Jobs 2014
18 ibid
Employment in the Financial Services Industry is skewed towards NSW and Victoria with both states employing more financial services workers than their population share. Only 18 percent of financial services employees work outside capital cities, compared with 37 percent for all industries.19
Overall, there are more females than males working in the Financial Services Industry, however, this varies between the sectors. Banking is a feminised sector with women being 55 percent. The auxiliary finance and investment services sector including brokers, financial planners and fund managers is male dominated with only 41 percent being women.20
There is a strong gender bias in a number of occupations in this industry;
19 DEEWR (2014) Australian Jobs 2014
20 ABS (2014) Labour Force, Australia, Detailed, Quarterly, May 2014
Figure 10:
Persons employed in Financial Services Industry by sector, 2014
Source: IBISWorld Industry Reports 2014: K6221A National and Regional Commercial Banks in Australia; K6221B Foreign Banks in Australia; K6222 Building Societies in Australia; K6223 Credit Unions in Australia; K6310 Life Insurance in Australia; K6321 Health Insurance in Australia; K6322 General Insurance in Australia; K6240 Insurance Brokers in Australia; K6330 Superannuation Funds in Australia; K6411A Investment Banking and Securities Brokerage; K6411B Mortgage Brokers in Australia; K6229A Money Market Dealers in Australia; K6419A Funds Management Services in Australia; K6419B Financial Planning and Investment Advice in Australia; K6419C Custody, Trustee and Stock Exchange Services in Australia; K6419D Superannuation Funds Management Services; K6420 Insurance Brokerage in Australia; M6932 Accounting Services in Australia
Banking
Accounting services
Custody, Trustee and Stock exchange Insurance Financial markets Superannuation Financial planning Mortgage brokers Credit management
1%
3% 2%
15%
22%
31%
5%
7%
14%
Figure 11:
Financial Services Industry employment growth, 2011-14 (‘000)
Source: ABS, 6291.0.55.003 – Labour Force, Australia, Detailed, Quarterly, May 2014, SuperTABLE E06 – Employed persons by Industry (ANZSIC group) Accounting Services is estimated based on ABS Census of Population and Housing Industry 2011 data.
Figure 12:
Financial Services occupational profile – percent of industry total
Source: ABS, 6291.0.55.003 – Labour Force, Australia, Detailed, Quarterly, May 2014,
Other
Clerical and
administrative workers
Professionals
Managers
45%
34%
15%
6%
200 180 160 140 120 120 100 80 60 40 20 0 2011 2012 2013 2014 Banks Accountingbookkeepers are 91 percent female21,
accounting clerks are 82 percent female and bank workers are 72 percent female. The more professional and highly paid roles, are generally male dominated - financial advisers and planners are 69 percent male, financial brokers 64 percent male, financial dealers 77 percent male, and accountants 51 percent males. Two broad occupational groups, Clerical and Administrative Workers and Professionals, dominate the Financial
21 Note that recent research by the Institute of Certified Bookkeepers shows only 80% of bookkeepers are female and there has been a slight increase in the proportion of male bookkeepers in the past three years.
Services workforce, accounting for around four in every five workers. This is markedly higher than their share of total national employment, at 37 percent or slightly more than one in three workers; see Figure 12.22
Financial Services is one of the most highly educated industries in Australia with 59.5 percent of workers holding an Advanced Diploma or higher qualification, compared with 39 percent for all industries; see Figure 13.23
22 Department of Employment (2014) Australian Jobs 2014
23 Austrade (2013) Why Australia: Benchmark Report Update June 2013
The higher education sector plays an important role in the provision of skills in this industry, with almost half of workers holding a Bachelor degree or higher, compared with 26 percent for all industries.
These industries have above average use of higher qualifications – Advanced Diploma and above.
Accountants, accounting clerks and bookkeepers are the most common financial occupations. Together, these three occupations employ 425,000 people across the economy. The Financial Services Industry itself employs 7,663 accounts clerks and bookkeepers; see Table 1.
Figure 13:
Percentage employed persons with Advanced Diploma or higher qualification, 2013
Source: Australian Bureau of Statistics, Cat. No. 62270 DO 001-201205, Education and Work, Australia, May 2013, Table 11 (released 29 November 2013); Austrade
Financial Services is one of the most highly educated industries in Australia with 59.5 percent
of workers holding an Advanced Diploma or higher qualification, compared with 39 percent
for all industries.
Education and training Professional, Scientific and Technical Services Financial and Insurance Services Health Care and Social Assistance Public Administration and Safety Information Media and Telecommunications
Table 1:
Top employing occupations in the Financial Services Industry by state/territory (‘000)
ANZCO OCCUPATION NSW VIC QLD SA WA TAS NT ACT Total
221100 Accountant 64.1 47.5 28.9 8.5 18.9 1.9 1.1 3.6 174.4
551100
Clerk, Accounting 45.4 34.9 30.0 8.9 16.1 2.3 1.6 2.5 141.6551200
Bookkeeper 26.6 31.1 23.4 8.2 15.7 1.6 0.7 1.3 108.5552100
Bank Worker 19.5 14.1 7.9 4.5 6.4 0.7 0.4 0.2 53.6132200
Manager, Finance 19.8 12.3 7.2 3.4 4.4 0.5 0.4 1.2 49.2222300
Financial Investment Adviser and Manager 18.5 10.4 7.4 1.8 4.2 0.4 0.1 0.6 43.3552300
Clerk, Insurance, Money Marketand Statistical 11.5 8.9 5.8 2.0 1.7 0.4 0.2 0.4 30.7
552200
Credit and Loans Officer 10.0 7.1 4.4 1.9 3.9 0.2 0.2 0.1 27.8222100
Financial Broker 9.7 5.7 2.7 1.4 3.5 0.3 0.2 0.2 23.7222200
Financial Dealer 7.8 3.2 1.6 0.5 0.9 0.1 0.1 0.3 14.6611200
Insurance Agent 4.5 4.0 2.8 0.6 1.8 0.1 0.1 0.1 13.8599300
Debt Collector 4.3 2.5 1.3 0.9 1.5 0.2 0.1 0.2 10.9224100
Actuary, Mathematician and Statistician 1.9 1.8 0.4 0.3 0.4 0.1 0.2 0.6 5.5599600
Insurance Investigator andLoss Adjuster 2.3 1.2 1.3 0.3 0.6 0.1 0.1 0.3 6.0
224300
Economist
2.6
0.7
0.1
0.1
0.2
0
0.1
0.8
4.6
Source: ABS, 6291.0.55.003 – Labour Force, Australia, Detailed, Quarterly, May 2014, SuperTABLE E08 – Employed persons by Occupation (ANZSCO occupation) Each year’s May employment estimate is the average of the relevant ABS LFS data for the 4 quarters up to and including May.
The accounting profession has experienced the strongest employment growth of all Financial Services occupations in the last four years, with employment numbers up by 11,700 since 2011. In most other occupations employment numbers have remained fairly stable.
INDUSTRY AND
WORKFORCE OUTLOOK
Industry outlook
The Financial Services Industry is positioning itself to respond to a range of demographic, economic, regulatory, social and environmental trends, including:
•
Policy and regulation changes
– a fluctuating regulatory
environment as a result of changes in government and new proposals arising from the Financial System Inquiry, and generally increasing regulatory requirements on the back of the global financial downturn along with recent investigations into the financial planning sector •
Technology transformation
– arange of technology developments including the increasing availability of large volumes of customer data, mounting rates of cybercrime, and growth in mobile services and payment systems
•
Changing customer needs
and expectations
– demographic and technology changes bringing demands for new products and services and increasing complexity of customer interactions, and •Social investment and climate
change
– increasing interest in social investment and integrating information on climate risks into various social products.The following section discusses how each of these issues impacts, and will continue to impact, the Financial Services Industry in the short to medium term.
Policy and regulation changes
The Financial Services Industry has always been highly regulated to protect consumers with new regulatory reforms for the purpose of building transparency, global interconnectedness and achieving stability.
Key reforms include:
•
Basel III
– introduction of the global regulatory standard designed to promote resilience by specifying the minimum amount of capital banks should hold came into effect in Australia in 2013 with full reforms in 2016.•
Future of Financial Advice
– reforms that focus on improving the quality of financialadvice, particularly product recommendations and improve investor protection.
•
Stronger super
– reforms to remove unnecessary costs of super administration and better safeguard retirement savings.•
International Financial Reporting
Standards
– new standards, common global language for business affairs so company accounts comparable across international boundaries.•
The Dodd Frank Act
– promoting US financial stability the most significant financial reform in the United States since the 1930s. Australian financial organisations that do business with the US must comply with extensive rules and requirements under this Act. •Customer Due Diligence
Standards
– effective from 1 June 2014, these standards strengthen the financial system against money laundering and terrorism financing. Reporting entities need to identify and verify each of their customers so they can determine the money laundering and terrorism financing risk posed by each customer. •Parliamentary Joint Committee
on Corporations and Financial
Services Inquiry
– looking at lifting the professional, ethical and education standards in the FinancialServices Industry. A number of banks announced higher education standards for their financial planning workforces.
•
Senate Inquiry into the
performance of the Australian
Securities and Investment
Commission
– included an examination of misconduct between 2006 and 2010 by financial advisers and other staff at Commonwealth Financial Planning Limited (CFPL). Recommendations are aimed at strengthening ASIC to allow it to be a proactive regulator.24•
ASIC review of retail life
insurance advice
– released in October 2014, reported an unacceptable level of non-compliance with laws which prioritise the needs of the client, the industry is on notice to lift standards and professionalism.25Higher regulatory costs from the latest wave of regulations means businesses need to review their business models. Analysts KPMG predict regulatory requirements for banks will force major structural change, including the split of global entities into a ‘patchwork of smaller locally or separately regulated subsidiaries’.26 Ninety percent of
finance and accounting executives who responded to one survey reported managing recent regulatory changes has been challenging for their business.27
Australian financial services also need to be prepared for further changes to policy and regulation arising from the Inquiry into Australia’s Financial System. Its objective is to make recommendations on how the financial system can most effectively help the Australian economy be productive, grow and meet the financial needs of Australians. The inquiry considers that
24 Sentate Standing Committee on Economics (2014) The performance of the Australian Securities and Investment Commission: final report
25 ASIC (2014) Higher standards needed for life insurance industry
26 KPMG (2014) Evolving Banking Regulation
27 Robert Half (2013) 2013 Salary Guide: Finance and Accounting
the financial system must satisfy three principles: efficiently allocate resources and risks, be stable and reliable, and be fair and accessible.
The report of the inquiry says the Australian financial system is operating effectively and not requiring broad systemic change, but does need a refresh to allow it to continue to meet future challenges.28
Technology transformation
The march of technology could be said to affect the Financial Services Industry more than any other; key trends are: • new and unforeseeable risks in data
privacy and cybercrime
• making best use of mobile banking technology and payment systems, and
• leveraging the availability of large amounts of customer data.
Financial services businesses also need to start preparing for emerging technologies:
•
Wearable devices
– banks and insurers will leverage the data generated from wearable devices. •The internet of things
– theexpanding network of physical objects that contain embedded sensors means insurers will be able to communicate with home, contents and cars.
•
Nextgen biometrics
– biometrics such as DNA matching, facial matching, retina recognition replace PINs and signatures; one Australian bank is one of the first to grant users access to mobile banking simply by placing their finger on their phone’s fingerprint scanning home button.29•
Virtual assistants and natural
language question and
answering
– more sophisticated interactions with computers will allow consumers to have queries dealt with as if they are speaking to an adviser.28 Murray (2014) Financial Services Inquiry Interim Report
•
New currencies
– when security and transactional integrity issues are ironed out crypto currencies, such as Bitcoin, have the potential to shake up the Financial Services Industry. Bitcoin ATMs allow consumers now to send money across the globe with no fees.•
Cybercrime
- according to PricewaterhouseCoopers’ 2014 Global Economic Crime Survey, 39 percent of financial sector respondents said they had been victims of cybercrime, compared with only 17 percent in other industries.30Organisations are shifting existing resources away from security device administration and monitoring, toward mitigation and incident response. Worldwide spending on information security was projected to top US$71 billion in 2014, an increase of 7.9 percent over 2013. •
Mobile technologies
– JuniperResearch has found that over 1 billion mobile phone users will have made use of their mobile devices for banking purposes by the end of 2017, compared to just over 590 million in 2013. Mobile banking technology is currently available in most regions of the world as a result of exceptional consumer demand, especially in developed regions.31
The insurance industry is also using mobile technology to attract new customers who want more self service options and modernised customer service tools.32
Mobile payments in the Financial Services sector found organisations need to:
– monitor the market
– develop an enhanced mobile presence
– focus on the user experience – build partnerships through the
30 PWC (2014) Global Economic Crime Survey
31 Juniper Research (2013) Mobile Banking Handset & Tablet Market Strategies 2013-2017
mobile ecosystem, and
– develop and implement mobile payment trials.33
• Data and analytics - if leveraged properly, Big Data can provide enormous opportunities for value creation; from personalising financial products and services to promoting customer engagement and loyalty. Analysts KPMG found that banks are facing these three challenges around data management: holding and using the right data; meeting wide ranging and significant increases in demands; and responding to concerns they do not have the right data, systems and IT architecture to manage risk.34
According to one analyst, the
competitive advantage in the Financial Services Industry will come from those that elevate privacy issues to the fore, that provide architecture with their customer’s privacy in mind, that put the customer in control of their data and that remain open and transparent in their use of that data.35
Changing customer expectations
Being customer centric is now a core business requirement for all, and especially, financial services organisations. Consumers now expect to be able to receive bundled products, service and advice, cross-channel capability, 24 hour interaction, services based on rewarding relationships and recognition of preferences, rather than pushing products on clients.36
Financial institutions need to build IT systems that enable customer centricity: • aligning IT and the business while
funding horizontal, customer centric capabilities
• expediting management decision cycles to respond to customer needs in a timely manner
33 GFT (2013) The impact of mobile payments on the financial services sector.
34 KPMG (2014) Evolving banking regulation
• developing a single view of the customer from a centralised information repository, and • linking IT people strategies to
the institution’s overall business strategies.37
Social and environmental investment
and climate change
The boundaries between business and social issues are blurring as corporate social responsibility (CSR) and conscious capitalism reshape businesses.
CSR and triple bottom line reporting have been part of the financial services language for some time. Increasingly financial services organisations, particularly banks and superannuation funds, are contributing to social or environmental outcomes and offering products that allow their investors to do the same.
The Financial Services Inquiry explained that ‘impact investment allows investors to align their financial objectives with their personal values by investing in opportunities that offer both social and financial returns’.
The Financial Services Inquiry also suggested that the Australian Government could play a role in removing a number of regulatory and red tape barriers to facilitate greater involvement by financial services in impact investing.
The world’s biggest insurer, Lloyds of London, recently urged insurers to include risks posed by climate change in their business models, after a record-breaking year in 2011, which saw the industry lose $138 billion to natural disasters. Australia has high exposure and sensitivity to climate change and insurers, super funds, financial markets and financial advisers all need to understand the potential implications on members’ assets and investments.
Workforce and
employment outlook
According to IBISWorld, four industry sectors are likely to lead the
37 PWC (2012) If they’re happy do you know it
employment growth in the Financial Services Industry in the next five years – custody, trustee and stock exchange; mortgage broking; financial planning; and superannuation funds management, IBISWorld forecasts the number of employees in the mortgage broking sector will grow 23 percent to reach nearly 15,500; the number of financial planning employees will increase by 22 percent to reach 20,500; the number of superannuation funds management employees will increase by 19 percent to reach 27,700; and the custody, trustee and stock exchange sector will grow by 19 percent to reach 110,000 employees by 2019.
The Hays Salary Survey found that for some job functions there is still a surplus of candidates yet in others, often those requiring highly skilled and experienced professionals, there is a shortage of suitable talent.
This survey also indicates the
employment market in financial services is still cautious, but positive signs suggest that over the next six months, financial services organisations will be looking to replace leavers, as well as hiring in growth areas.38
Research recently conducted by IBSA with its Financial Services Industry stakeholders indicates that challenges likely to have a significant impact on the shape and size of the workforce, in addition to those discussed above include:
• offshoring ICT functions • maximising opportunities and
managing competition for business from Asian countries
• filling gaps in management and leadership skills, particularly among frontline workers
• mitigating and reversing low numbers of women in high level positions
• working with a more diversified workforce, and
• services for the ageing consumer.
38 ibid
OCCUPATIONS
IN DEMAND
A list of Occupations in Demand is provided in Appendix B. The list is collated from industry intelligence presented in this Escan on the industry, employment trends and the workforce and from survey responses at IBSA’s industry consultations. This list contributes to the workforce development and planning strategies highlighted in Chapter 3 and also presents a clear relationship to training packages.
The occupations and job roles reported as in demand in the Financial Services Industry are:
• mortgage broker, credit assessor and lending manager
• financial investment adviser (wealth management and super funds) • workers compensation case manager • insurance claims manager
• insurance broker • accountant
• accounting assistant
• business intelligence/data scientist • business risk analyst
• compliance manager, and • auditor - accounts.
CHAPTER 3
Identified
workforce
development
needs
CHAPTER 3
Identified workforce
development needs
LEADERSHIP AND
MANAGEMENT
Leadership and management skills are particularly important for companies in times of complex change; with regulatory structures, evolving customer expectations, technology developments and profound demographic shifts complicating the environment.
Aspiring and established leaders need to guide their organisations through change with high energy levels, commercial focus and strong all-round business and people skills.39 The leadership principles
needed by leaders in the Financial Services Industry are to:
• articulate a compelling vision that inspires action
• build trust
• cultivate authentic leadership • use informal networks, and • recognise, prioritise and mobilise
for potential crises.40
Managers of frontline employees are
39 Hudson (2013) Salary and Employment Insights
40 Deloitte (2010) Coping with complexity: leadership in the financial services
also critical to organisations as they direct as much as two thirds of the workforce and are responsible for the part of the company that typically defines the customer experience. These line managers are sometimes promoted for their functional competence rather than their inherent management skills and often lack the competencies to be effective, particularly as managers become increasingly involved in staffing issues (once handled by human resource units).41
Changing demographics mean leaders and managers will deal with cross generational teams and will need to build engagement and trust with training and development being core to the organisation.
DATA AND ANALYTICS
Companies are increasingly turning towards more complex and intricate ways of capturing, manipulating and understanding data, needing access to staff who can sort masses of data, draw conclusions and effectively communicate what the data is saying. Data analysts need to understand what business problems are in play with creativity and
41 Marks Sattin (2014) The changing role of the line manager in finance
business acumen being critical, as well as being able to share data and insights with those outside the finance function.42
Increasingly, even non-specialists in the industry need to have an understanding of the language of analytics (maths, statistics and IT) to understand what their programs and services can offer, and how to derive value from analytics for all parts of the organisation.
The Financial Services Industry is also dealing with the ethical, legal and security risks associated with maintaining and using large quantities of data, and ensuring staff understand these.
REPORTING, RISK AND
REGULATORY EXPERIENCE
Regulation, particularly in the financial markets, continues to grow and the role of regulators continues to expand. Compliance specialists and technologists experienced with compliance tools are being hired in record numbers.
CULTURAL COMPETENCE
China and India have more than doubled their share of the global
economy and the size of China’s economy has expanded nearly ten times in the last 20 years and India’s has grown five times.43 With an
expanding middle class in Asia, new markets are being created for financial products and Australia’s financial institutions are well positioned, to capitalise on these emerging markets. Deloitte lists wealth management as a growth hotspot for Australia – one of the ‘fantastic five’ industries that ‘collectively have the potential to overtake mining and keep Australia at the top of the world’s national prosperity charts’44 and stakeholders
contributing to the Financial System Inquiry agreed that facilitating integration with Asia is critical.
Nevertheless Australia needs to improve its development of skills and business models to fully benefit from the Asian demand. Job specific skills, scientific and technical excellence, adaptability and resilience and the ability to use
43 Austrade (2014) Why Australia: Benchmark Report Update June 2014
44 Deloitte (2014) Positioning for Prosperity: Catching the next wave
creativity and design based thinking to solve complex problems are a focus along with broadening and deepening our understanding of Asian cultures and languages. IBSA industry consultations also highlighted the need for Australian financial services workers to become more skilled at building international partnerships and developing understandings of different cultures, political and regulatory systems.
VERSATILITY COMBINED
WITH COMMERCIAL
ACUMEN
Employers indicate they are looking for finance people with the ability to work across and analyse all business functions and operations, and identify opportunities for greater efficiency and productivity, combining financial prowess with analytical skills and commercial acumen.45
45 Hudson (2013) Salary and Employment Insights
THE AUTONOMOUS
WORKER
Workers in the Financial Services Industry, along with those in many other industries, are increasingly looking to build their employment to suit their individual preferences, having various jobs at once - a mix of multiple part time jobs or contracts.46 The growth of
online skill marketplaces like Freelancer. com and Airtasker are making it easier for people to actively take control of the way they work, and demonstrates people are willing to go where their skills are needed.47
The autonomous worker raises issues for the worker and their employer or contractor, needing to identify work and career options, and to undertake learning appropriate to work needs and goals.48
46 Future of Work Research Consortium (2013) New Ways of Working– Hotspots Movement, 2013 47 White (2014) Tomorrow’s insurance workforce
48 Dept of Industry (2013) Core Skills for Work Framework
The Financial Services Industry is also dealing with the ethical, legal and security risks associated
with maintaining and using large quantities of data, and ensuring staff understand these.
CHAPTER 4
Current
impact of
training
CHAPTER 4
Current impact
of training packages
FINANCIAL SERVICES
TRAINING PACKAGE
The Australian Financial Services Industry continues to maintain its relatively strong position compared with that industry in many other developed economies. The strategic agenda for the industry is dominated by evolving regulation, embedding of a risk management culture, adjusting to demographic changes, increased investment in technology including core systems, mobile platforms and social media and, with emerging competition from non-traditional financial services, a renewed focus on the customer. Maintenance of the training package is significantly influenced by regulations that operate over a range of financial services functions and across many industries. Regulatory changes to compliance, governance and customer advice requirements has seen a growth in: •
Risk management
– improvingpractices and decision making and being underpinned by systems and processes, and codes of conduct managed through compliance and ethics frameworks
•
Payments
– responding to growth of real time payments through smart phones and other systems•
Regulatory agenda
– supporting financial services’ clients where new regulations have a significant impact •Data and analytics
– gainingvalue from big data to understand customer needs
•
Customer and channel
– building revenue through enhanced salesforce effectiveness, improved customer relationships and optimised delivery, and•
Technology transformation
– realising targeted benefits, within timeframes.In particular, decisions by the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investment Commission (ASIC), the Tax Practitioners Board and FOFA laws being introduced by government, will have a profound impact on the Financial Services Training Package. In 2013-14 the focus was on risk management, alignment of industry standards with new government regulation, compliance and ensuring the Training Package is current, and the changes transparent to the industry.
Focus for the future
During 2014-15, the Training Package will focus on developments of enhancements
needed by regulatory bodies and new laws. Changes to the Corporations Act including Chapter 5D (a financial services licensing regime), have seen moves to more closely align compliance and governance initiatives. Licensing to enhance the quality of advice being provided by financial product advisers will inevitably affect content.
The Tax Practitioners Board (TPB) has approved Skill Sets for commercial law and Australian taxation law, creating additional pathways for individuals to meet the Board’s approved requirements for Tax Agents. The Skill Sets outline the development of VET achieved skills required for tax agent registration: Tax Law for Tax Agents Skill Set (Tax documentation); Tax Law for Tax Agents Skill Set (Tax plans); and Commercial Law for Tax Agents Skill Set.
Australia’s superannuation system is subject to frequent legislative and regulatory change and, especially when the superannuation and tax systems intersect, industry participants need to be fully informed of their potential product implication. The wealth management sector has seen Chapter 5, D - Corporations Act come into effect requiring units of competency to be aligned to the new
compliance standards and legislation. IBSA is working with the State Trustees and wealth management providers to upgrade content.
IBSA and the Personal Injury Education Foundation (PIEF), have been working on building the Personal Injury Management (PIM) competencies to support the establishment of the National Disability Insurance Agency (NDIA) and implementation of the National Disability Insurance Scheme (NDIS).
NDIA has been working with PIEF since 2013 to identify and develop training and qualifications for NDIA, and the broader disability insurance sector, to support getting injured workers back to work. The Self Insurance Corporation of NSW (SICorp) has also been working with PIEF since 2012 reviewing VET training to meet the skills requirements of health liability specialists in the Treasury Managed Fund (TMF) and the Local Health Districts (LHD) in NSW; the Victorian Managed Insurance Authority (VMIA) has similar interests that IBSA is pursuing.
Uptake of training packages
The following data are reported from the annual NCVER VET Provider Collection and the quarterly Apprentice and Trainee Collection; these data report publicly funded training and fee for service VET provided by public institutions. They will assist consideration
publicly funded VET in IBSA’s Training Packages.
The tables and figures should be read with an understanding that significant amounts of training also occurs outside the publicly funded VET system including: • fee for service training in national
qualifications provided by private training providers
• inhouse training in national
qualifications delivered by enterprise RTOs, and
• non-accredited training conducted inhouse or by external providers. Attempts to directly correlate tables of commencement and completion should be avoided because:
• an enrolment is recorded for each year the course is active – multiple enrolments are recorded when a course is undertaken over more than one year, and
• completions are not uniformly reported, ie some jurisdictions only report completions when they award a certificate (rather than a Statement of Attainment) and this is only done when requested and paid for by the completing student.
These factors may result in an over reporting of enrolments and under reporting of completions.
Enrolments and qualifications issued
In 2013 there were 54,251 enrolments in Financial Services qualifications. Enrolments declined significantly in 2013, down by over 7,500 or 12.3 percent, and grew only slightly between 2011 and 2012, not nearly as fast as they grew in the previous two years; see Figure 14.49 Nevertheless, the Financial
Services Training Package
