Generous pay packages can backfire
The financial advice sector is currently handling a significant shift in how talent is incentivized. Remuneration packages are evolving beyond simple salaries to include equity and other incentives. This change comes as the market tightens and experienced professionals hold more power in negotiations. Practices are struggling to scale because the talent pipeline has stagnated. While technology can improve efficiency, hiring more advisers remains the most effective way to increase capacity. This reality has forced firms to become more creative in how they attract staff.
Kaizen Recruitment’s July 2026 Market Update notes that the sector is now in a position where it is an employee’s market. Advisers are selective and can demand higher pay for their expertise. The report highlights that the talent shortage appears acute, particularly for experienced hires who can bring existing client bases. The report also points out that hiring activity is growing at the junior end as firms attempt to fill gaps. However, many new entrants lack the depth required for complex advice, making training and development a priority for many firms.
Simon Gvalda, a consultant at Kaizen, spoke with Money Management about the correlation between supply and salaries. He observes a strong link between the decrease in adviser supply and the rise in pay. The expectation for remuneration package offerings has grown significantly for senior professionals. It is no longer enough to offer a standard salary when competing for top talent.
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The Risks of Equity and Long-Term Commitment
Senior advisers often want equity to generate long-term wealth. Businesses that offer this are better positioned to attract talent. However, Gvalda warns that these arrangements also come with greater complexity. Both the business and the adviser need to be certain of the fit before committing to this arrangement. The source notes that unwinding these agreements is difficult if there is a mismatch.
This creates a risk for both parties involved. If the cultural fit is wrong, or if expectations aren’t aligned, the situation can become messy. It also shrinks the pool of talent. Those with equity are less likely to move firms, which adds to the shortage of advisers who are open to changing roles. They need to be sure the vibe is right, or at least they think it is. The most attractive employers are those which can offer a clear value proposition. This might include a strong client pipeline, a supportive compliance framework, or genuine flexibility.
Mergers and Portable Client Books
The strong trend of mergers and acquisitions is another key factor in this recruitment dynamic. Some businesses are now using acquisition deals as a way of growing their adviser count. The report states that M&A activity has picked up across the wealth management space. Consolidation creates both uncertainty and opportunity for advisers and hiring firms alike.
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The most consistent theme emerging from this activity is the need for advisers with a portable book of clients. These professionals are the most sought-after in the market by some margin. This dynamic mirrors the general market trend of valuing assets that generate cash flow immediately, rather than the slower build-up of a traditional practice. Just as investors prefer established revenue streams over speculative startups, firms are prioritizing the immediate value of existing client relationships over the potential long-term growth of a new hire.
In the meantime, this constrained environment is pushing more businesses toward alternative measures to improve capacity. They are looking at technology, offshoring, and investment solutions. For example, Money Management recently covered a Sydney advice practice which has brought on four ‘digital employees’ to help with administrative tasks. These systems potentially replace junior or administrative staff.
