The numbers of advisers who entered the financial advice industry since 2018 is still significantly below average levels, even three years after the Royal Commission, according to Wealth Data.
The firm said this was a result of the ongoing issues around the Financial Adviser Standards and Ethics Authority (FASEA) requirements and a lack of defined pathway for new entrant financial planning candidates.
Wealth Data said the total number of new advisers and provisional advisers since 2019 equalled to 163.
By comparison, the number of advisers who held the ‘current’ status, as per the Australian Securities and Investments Commission (ASIC) Financial Adviser Register (FAR), and commenced in 2016 and 2017 stood at 1,488 and 1,021, respectively.
In 2018, the number of new adviser roles that held a ‘current’ status was 2,166.
“We can see that the number of advisers who are current and what year they commenced basically fell off a cliff post 2018. In fairness, this was driven by a surge in 2018 to take advantage of new FASEA rules. For example, we currently have 2,166 adviser roles on the FAR for advisers who commenced in 2018 and only 34 for 2021,” Wealth Data’s director, Colin Williams, said.
According to him, while the total of new advisers and provisional advisers since 2019 was encouraging, it would not stop the losses.
“For example, if we use a starting point of 19,000 advisers and have a natural attrition (retirements, resignations out of advice, etc) of only 4% that would equate to a natural loss of 760 advisers in one year,” Williams said.
“To replace 760, we would need to hire much more than 760 to account for the ones who simply don’t make it as an adviser.”
Source: Wealth Data
The number of actual advisers continued to decline further this week, although at a slower rate compared to a few weeks ago, and dropped to 19,097.
At the same time, the number of adviser roles decreased to 19,368, with 26 licensee owners posting net gains for 47 roles while 37 licensee owners saw net losses of (-59) roles.
AMP Group was down (-11), with losses across AMP Financial Planning, Charter, Hillross and IPAC.
Following this, accounting firm Daniel Allison reduced their adviser number by half, moving down from 12 to six roles, and Boston Reed and HESTA were both down (-3).
Three groups Commonwealth Bank of Australia, National Australian Bank, and Australian Administration Services better known as Link were down by two roles (-2) and around 30 licensee owners reported a loss of a net (-1) adviser each.