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”.
“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.”