For the first time in years, the financial advice market is seeing tailwinds rather than headwinds, according to Stephen Prendeville.
Speaking to Money Management, Prendeville, who is the founder and director at Forte Asset Solutions, said sales of businesses had been slow in the last three years despite the record number of adviser losses.
The number of advisers has fallen to around 15,700, down from as many as 21,000, but many of these losses came from those advisers who worked at banks or as accountants.
However, he said he is seeing the current state as an optimistic time for the market, helped by reforms around the Quality of Advice Review and the growing number of people approaching retirement.
Prendeville said: “Previously, because of the Hayne royal commission, the financial advice exam and because of COVID, people felt like they couldn’t sell their business whereas now there is no regulatory risk in front of us.
“This has freed up people’s time, their fees have increased, their profitability has increased, and we are becoming a profession. It is the first time there is confidence among the industry and among individual businesses.
“We’ve had nothing but headwinds and now there are finally tailwinds.
“I think the M&A is purely reflective of rising confidence about the future.”
There has been a high volume of merger activity in recent months helped by deals from AZ NGA, Count and Invest Blue.
Count and Diverger agreed to merge in September to create Australia’s third-largest licensee with 579 combined advisers. Count also acquired Affinia Financial Advisers, which was formerly owned by TAL, adding over 100 advisers to the business.
Prior to the deal with Count, Diverger itself had acquired licensee super business AFSL Compliance and technology and cyber security provider Priority Networking.
There was also a merger between Ironbark Asset Management and national advice firm Invest Blue to create a $64 billion diversified financial services firm. The merged entity will have more than 500 staff across 35 locations.
Meanwhile, AZ NGA (AZ Next Generation Advisory) has also taken stakes in several financial advice businesses, including Perth advice firm The Wealth Designers (TWD), Foster Raffan iPlan in Sydney in August, and McLean Delmo Bentleys in Victoria.
It also made a strategic partnership in Rose Partners, a Melbourne-based accounting and advisory business with a high-net-worth and healthcare professional client base.
