If all members move over, over half of the Financial Advisers Register (FAR) could be members of the Financial Advice Association of Australia (FAAA).
The FAAA was formally completed at the start of April after members of the Financial Planning Association of Australia (FPA) and the Association of Financial Advisers (AFA) voted to merge the two entities.
It was expected that members would join the FAAA by 30 June and, if all members did so, there would be a total of 8,835 advisers, according to Wealth Data. This represented 56 per cent of total advisers on the FAR.
Almost 6,700 of those members sat within the financial planning business model, with the highest numbers sitting at Centrepoint and Insignia which had 82 per cent and 79 per cent of their advisers holding membership.
On the other hand, Sequoia had less than half (44 per cent) of its advisers with memberships and AMP had 56 per cent.
Colin Williams, founder of Wealth Data, said: “The FAAA potential is at 60 per cent for licensee owners that have between 20 to 49 advisers up to a high of 71 per cent for the three licensee owners that have 500+.
“The new FAAA may have a big opportunity, but not without risks. No doubt other associations will be hoping that this is a good time to extend their reach.”
However, Williams noted the large volume of members would mean the organisation may have to adapt in order to represent a broader sub-section of the advice community than they did as two different associations.
“We are seeing a greater number of advisers seeking to start their own AFSL, with another four starting this week. Any association must be able to deliver a proposition that is flexible enough to appeal to all types of advisers working in very different licensees,” he said.
Looking at the weekly data, Wealth Data said there was a net change of one adviser in the week to 6 April. However, there were 24 new entrants who joined the FAR, up from 15 in the previous week.
Some 44 licensee owners had net gains of 50 advisers, and 32 had net losses of 48 advisers.
“A net gain of only one adviser suggests a quiet week. However, some 120 advisers have been affected with 24 new entrants, four new licensees and more losses for some major licensees. With 24 new entrants but only a net gain of one, [it] indicates that 23 experienced advisers have ceased on the ASIC FAR.”
My demographic actuarial model is that independent financial advisers with non-aligned big bank AFSLs should be around 1% of population for the functional effective application of FASEA principles. 15,000 advisers on the FAR is not functional nor effective in a Microprudential framework. My actuarial model suggests 260,000. The Government should ask its Commonwealth Actuary to do a calculation. Back in 2011, Minister Bill Shorten of Financial Services said “no politician will listen to an actuary”. Perhaps intelligent TEALS can ask this question on the floor of Parliament?