Almost two-thirds of financial advisers believe now is a good time to be in the industry and younger advisers are exhibiting greater optimism than their older counterparts.
Out of the 250 advisers surveyed by research firm Wealth Insights, 62 per cent describe current conditions in 2024 as “good” or “very good”.
In comparison, this figure was at 55 per cent a decade ago, in 2014.
Wealth Insights said this is its highest level of positive sentiment towards the profession since 2017, with sentiment declining following the Hayne royal commission in 2018 and the subsequent fallout from its findings.
Nearly one-third (30 per cent) choose “average” and the remaining 8 per cent believe conditions are “bad” or “very bad”. Breaking this last segment down by age groups, it found that 18 per cent of Baby Boomers fall into this category, compared to just 4 per cent of Non–Boomers.
When looking at investor confidence, which Wealth Insights calculated based on adviser responses to their clients’ prevailing attitudes, nearly three-quarters said they are somewhat, or more, confident about investing in markets right now.
Commenting on these findings, LJ Collyer, head of adviser distribution at Allan Gray Australia, said he believes advisers in the Baby Boomer cohort demonstrate lower optimism due to compliance concerns.
“We understand why advisers often rate compliance issues as one of their biggest concerns. But while compliance is incredibly important, there are some inefficiencies in the system that can make the provision of advice more expensive for clients and burdensome for advice practices,” he noted.
Another area potentially deterring advisers and keeping them up at night is a lack of clear succession plans and staffing issues, he said.
Money Management recently explored why succession planning is critical for long-term success, particularly as business owners very rarely plan their exit from the advice practice in advance.
Looking at Non-Boomers’ optimism, the report commented: “Gen Y are in demand promoting salary increases and partnership discussions, so it’s not surprising that the majority of them feel that times are good/very good.”
In addition, Collyer attributed the uptick in positive sentiment among younger advisers to shifting viewpoints more broadly.
He explained: “The industry has recognised that if it wants to thrive in the future, the next generation must be recruited. In turn this promotes salary increases and partnership discussions, which is extremely positive for the industry to grow.”
The number of new entrants on the Financial Advisers Register (FAR) now stands at 112 since the start of the 2024–25 financial year, according to Wealth Data. Some 376 advisers entered the profession for the first time in the 2023–24 financial year, meaning that FY25 is off to a strong start in proportion.
A survey of licensees conducted by ASIC found that firms are finding the professional year program for new entrants a positive experience.
“All licensees involved reported a positive experience of supporting a provisional relevant provider through their professional year.
“Some listed the benefits as supporting and assisting with their succession planning, and appreciated that they could mentor and train a provisional relevant provider from within the business rather than hiring an external adviser.”
