As the Australian Securities and Investment Commission (ASIC) has renewed its regular reporting on adviser numbers on its Financial Adviser Register (FAR), the expectation is the number will drop further this month to 17,200, according to Wealth Data.
And it would continue to fall thereafter, with the expectations of between 15,000 and 16,000 later in the year.
This followed a story by Money Management last week that 600 advisers left the industry during December.
Looking at peer groups, the financial planning sector took the highest hit with a loss of 1,652 or 13%.
“This sector is in some ways a story of ‘large versus small’. The only real growth is the number of new licensees with 131 licensees opening and 47 closing - virtually all new licensees being small licensees (less than 20 advisers),” Wealth Data’s director, Colin Williams, said.
“While some of the large licensee owners who operate in this sector suffered heavy losses. Their losses are much greater than the total loss of (-12.91%) for the sector and their combined loss of 964 advisers, represents more than half the losses across the sector.”
Following this, overall the losses stood at (-14.43%), with the hardest hit in percentage terms sector being accounting – limited advice (mostly advice limited to self-managed super funds) which was down by (-36.31%)
Also, the sector was considered as the most likely to deteriorate further as more reporting would come in over the next couple of weeks. This sector also saw 121 licensees close and none commenced.
The investment advice sector, which mostly provided portfolio advice often using direct investments, held up very well through to December, but got hit hard in the last few weeks due to the result of the Financial Advisers Standards and Ethics Authority (FASEA) exam.
Overall it was down (-297) advisers or (-8.69%). However, since the start of December, it posted around two thirds of their losses in one month.
On the other hand, the best with losses of (-5.95%) was the accounting - financial planning (holistic advice, mostly owned by accounting groups) sector.
According to Wealth Data, this group was described as a relatively small sector of the market with less than 1,000 advisers, which saw a growth in the number of licensees with 15 commencing and nine closing.
Source: Wealth Data