Advisers numbers already running 15% below historic average

8 January 2021

The number of financial advisers in Australia was already running close to 15% below the long-term average even before the industry got to the end of the 2020 calendar year. 

According to the Australian Securities and Investments Commission (ASIC), as of 5 November 2020, there were 21,284 current financial advisers on the Financial Advisers Register (FAR) – with the regulator noting that this was “approximately 14.6% below the long-term average (of 24,930) prior to 1 January 2019” 

ASIC’s confirmation of the manner in which advisers leaving the industry came in response to questioning from a Parliamentary Committee, with the regulator stating it was “aware that the financial advice industry has undergone considerable change in recent years”.  

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“Many large financial institutions have either sold or reduced their financial advice businesses. At the same time, a number of financial advisers have either left, or signalled their intention, to leave the industry,” the ASIC answer said. 

ASIC had been asked by Queensland Liberal back-bencher, Bert Van Mannen what was ASIC’s strategy and how I intended to “protect retail consumers when independent advisers are exiting the industry due to over burdening regulatory obligations?” 

“Where does the average Australian consumer get their quality, holistic financial advice from when local, suburban advisers no longer exist?” he asked. 

ASIC could not provide a direct answer and, instead, said it wanted the industry and advisers themselves to tell it what should it happen. 

“ASIC wants Australian consumers to have access to affordable, good quality personal financial advice that meets their needs. In light of this, ASIC is currently undertaking a project that is looking at unmet advice needs and how to address them. Amongst other things, this project is examining the issues or impediments advice industry participants face in meeting consumers’ unmet advice needs,” ASIC said. 

“As part of this project ASIC has recently published Consultation Paper 332 Promoting access to affordable advice for consumers. CP 332 seeks information from industry participants on the issues and impediments that exist around them delivering affordable personal advice. We are particularly interested in better understanding any issues or impediments that are within ASIC’s power to address. Affordability of, and access to, advice are key issues discussed in CP 332, and we are keen to receive feedback on these issues.” 

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it's not 21,284, it's about 20,800 I am tracking this closely as I am the only one who is making the bold prediction that by the time the education standard becomes compulsory there will be approximately 5,000 advisers remaining they will mostly already be multi-degree qualified and serve high net worth clients and have very little capacity to serve more clients

it should be a huge decline by the end of this year, approximately 5,200 down to 15,600 there won't be anyone left to service retail clients ASIC should provide a 13 00 number for retail clients to call them instead so they can give them advice.

Not far from my predictions. Big business have all moved towards wholesale advice, therefore the "affordable advice to everyday Australians" has already been thrown away, and that is before the education standards timeline has even come close.

My prediction is that there will be around 14k remaining in 4 years. The decline from now until that point will be much more gradual with a large increase of "exiters" in the 6 months prior to education deadline.

If businesses and regulators don't work out a solution for bringing new entrants into the industry (property schemes are the only businesses putting people through PY currently, and they're product floggers not FP's), then the industry is doomed. Already from what I've heard, the vast majority of those studying FP Degrees don't actually want to enter the industry. Where will any new entrants come from to keep the profession going?

14,000 that is wildly optimistic. perhaps you are not seeing what is happening at the coal face.

that many just won't survive

ASIC have no idea how to manage the dwindling numbers in financial planners, and frankly, they don't care !!!

Correct, but there are still too many. I haven't seen any media reports that people can't find advisers. There are plenty of lifestyle and money coaches out there to assist.

Yes, there are plenty of alternatives to professional advice out there. Although a couple less with Melissa Caddick and Squirrel Super now off the scene.

that Caddick lady was classic even used someone else's afsl no.

btw, I see many advisers posting on their unprotected LinkedIn profiles their fpa or AFA or accounting body membership numbers. please do not do that and give criminals just one more avenue to rob people using your numbers.

I'm coming across orphaned clients seeking advice all the time, those too small to deal with are left without an adviser and those wealthier clients I am dealing with and taking on. It's great for my business but not really a win for the industry or consumers. As for Wealth coaches, I would suspect that a lot of these are ex-planners avoiding having to deal with ASIC. "Wealth coach" is certainly something I am looking at transforming my business into in the future rather than having to contend with the enormous sunk cost expenses associated with running a Financial advice business. But the growth of "wealth coaches' will surely just lead to significant amounts of unregulated advice, surely a better solution is to simplify the existing system so that affordable, quality advice is not unnecessarily expensive due to an overly complicated compliance regime.

ASIC are liars. They want financial advisers bankrupted and their wealth to be transferred to their clients. Look at their actions, not their words. PS. I am sick of the misleading reporting of ASIC's Consultation paper 332. If you read it, you will see they are only interested in simple, one-off pieces of advice. In other words, they are looking at how they can make it easier for ther industry fund mates to operate fake advice activities which are actually sales/customer operations. CP332 neatly provides an appearance of ASIC listening to the advice industry. But in truth, ASIC has no intention of relaxing any of their extreme, bizarre and droconian interpretations of the corporations act which are making life impossible for real financial advisers.

Agree completely.

This is what should happen ASIC IMO:
1. suspend FASEA exams and refund all planners who paid for this waste of time which has only resulted in increased cost of advice.
2. Remove ASIC and TPB fee for no service
3. Change opt in to opt out and remove fds requirements
4. reduce the ridiculous product comparison requirements.

ASIC unlike Shiptons tax advice, the above suggestons are at my expense.

Some good points Mr G, but in relation to TPB removal, greater minds are well ahead of you. A government review into TPB conducted in 2018 recommended its removal from financial adviser regulation. Then in early 2019 Royal Commissioner Hayne recommended a single disciplinary body, which implicitly requires removal of TPB (and AFCA and AUSTRAC and others) from financial adviser regulation.

Yet here we are more than two years after the TPB review, and nearly two years to the day from the RC recommendations, and Jane Hume has still done nothing about it. TPB removal would have to be one of the politically easiest battles of all time in the war against regulatory overkill. Pretty much everyone supports it. But she does nothing!!

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