Which advice model is seeing the greatest adviser losses?

With a loss of some 5.3 per cent in the calendar year to date, the superannuation fund model has been seeing the greatest adviser losses of all the advice models. 

It began the year with 754 advisers. As of the week to 21 September, the number has declined to 714, with FSSP (Aware Super) down by six advisers in the week to 21 September and the advisers are currently not showing as appointed elsewhere.

Wealth Data noted these losses have contributed to the super fund model having the greatest losses in percentage terms YTD. 

The model saw a similar decline of 5.2 per cent last year, beginning 2022 with 818 advisers and ending with 775. 

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The downturn goes against proposals in the government's formal response to the Quality of Advice Review for superannuation funds to provide retirement income advice to their members, a move that has received a mixed response from the financial advice industry.

Meanwhile, the accounting – limited advice model has seen an adviser net change of -4.9 per cent, falling from 626 to 595 this calendar year.

The financial planning model recorded a -0.8 per cent net change, from 10,521 to 10,435. 

Interestingly, the investment advice model has seen no change in the calendar year, remaining at 2,928.

The accounting – financial planning model has been the only model to witness growth. It is up 5.5 per cent, with adviser numbers rising from 841 to 888. 

The total advice industry currently sits at some 15,679 advisers. 

The decline of the super fund model will likely be one watched carefully, given the Federal Government accepted some 14 of the 22 recommendations in the Quality of Advice Review (QAR) in June, allowing super funds to provide more retirement advice and information to their members.

It would work with industry to consider adopting, and tailoring as needed, QAR recommendations 1–4 (around personal advice, general advice, relevant providers, and good advice duty), the remaining parts of recommendation 5 (statutory best interests duty), and recommendations 12.1 and 12.2 (on design and distribution obligations) to allow super funds to provide advice. 

Additionally, super trustees would be provided with legal clarity around current practices for the payment of adviser service fees, accept in principle recommendation 7 around deduction of adviser fees from super.

However, Michelle Levy, QAR reviewer, has since stated super funds already have too much on their plate to provide retirement income advice to members.

More recently, in an op-ed for The Australian, she said the law “should not continue to assume that financial advice is being given by a person”, hinting that advice from super funds could be given by a digital advice tool.