Almost half of the advisers who have departed this year have been in the industry for less than 10 years.
During the calendar year, some 620 advisers have departed and ceased, according to Wealth Data.
The average years’ experience combined of the advisers who have left is 14.3 years compared to 15.6 years’ experience held by the average of advisers who remain active.
This indicates those who remain in the industry are slightly more experienced than those who are leaving.
Of note is the fact that almost half of the 620 advisers, some 298, have been an adviser for less than 10 years with the average adviser who commenced post-2013 having 6.1 years of experience when they left.
They accounted for 48 per cent of the departures this year.
Wealth Data founder Colin Williams told Money Management it is surprising to see the figure so high this year as previous reasons for departure, such as the Financial Adviser Standards and Ethics Authority (FASEA) exam, are no longer an issue.
“There is no FASEA exam now, no hurdles, advisers are flat out and in demand as there is a smaller market now that people have left. The advisers remaining are busy.
“New advisers tend to be more understanding of compliance and the requirements of the job too than their older colleagues.”
Less than a quarter of advisers who left this year had commenced before December 2002, and Williams suggested they may now be hoping to utilise the experience pathway to remain active, having remained through the Royal Commissions and its follow-up changes.
“The older advisers who remain are hanging on,” Williams said. “They have likely been given a boost by the experience pathway.”
Looking at adviser movements for the week to 10 August, there was a net loss of four advisers.
Some 21 licensee owners had net gains of 28 advisers and 28 licensee owners had net losses of 32 advisers, both smaller than the previous week when 42 joined and 43 departed.
There were nine new entrants this week, while two new licensees commenced and one ceased.
Beryllium Advisers gained four advisers, three of which came from Millenium3 which is owned by Insignia.
Looking at losses, CPS Capital Group was down by three advisers, and Bell Financial Group and Sequoia were both down by two. Some 25 licensee owners were down by a net of one, including Bombora Advice, Shaw and Partners, and AMP Group.
I would like to think that at least some of the older advisers stay because of the passion they have to improve peoples’ lives.
Maybe this is something that takes a longer time to develop, that younger advisers simply do not have?
Maybe older advisers are hanging in there because they purchased businesses, incurred debt after the 2013 FOFA reforms and now there business are worth a fraction of what they were due to the governments efforts and no one wants to buy these. Or perhaps simply older advisers have no alternatives.
Many of the less experienced advisers, whilst possibly better with technology and “compliance” lack one thing that most older advisers had in spades. A thing called empathy. The role of Financial Adviser is not just about retirement plans, paying down debt & tax effective strategies. It is being there in times of tragedy, of business collapses, and assisting your clients when they are vulnerable and cannot pay your invoices. Those who run their Practices like this, are the most professional and the most admired.
They are confused that people who have been financial planners for shorter periods are leaving? It is a terrible job, personally the only reason I am doing it is because I have a business to protect and I can’t do anything else. For anyone young and having options — take them because this mess won’t be improving anytime soon.
Article states:-
“The older advisers who remain are hanging on,” Williams said. “They have likely been given a boost by the experience pathway.”
Hmmm, interesting that eh? I’d make two comments on that particular little nasty . . .
1) Watch what happens with these older advisers come 2026. Plans have been made prior to the so-called ‘pathway’ announcement
2) Such a shame this ‘pathway’ announcement wasn’t made when it should have been made – you know – at the very beginning. What I mean is in time to save the ‘other’ experienced advisers (most all of them) from leaving with early retirement before they wanted to AND the tragic adviser suicides due to the culpable politicians slicing and dicing rules and people to feather their own nests and re-election chances. Nothing new there of course. What’s NOT mentioned in the article is the CAPACITY in which these older advisers continue to practice. Generally in a capacity LESS than prior FARCE-IA.
My son after 5 years was one of those young advisors that left. It was a real shame as clients loved him, he was a magnificent advisor, extremely detailed and knowledgeable. Unfortunately he left because he was spending more time doing paperwork than looking after clients. We are loosing more and more young people due to unnecessary red tape squashing their passion rather than a love of the industry.
I question the validity of these numbers. If the advisers’ level of experience is based on ASIC registers, they will be well out. A great many advisers began well before licensing commenced and only obtained a license when absolutely necessary. This would indicate that the loss of experience is far greater than this story would indicate.