There are signs the financial advice industry is stabilising as Q3 2023 demonstrated the second-lowest number of exits and the highest number of new entrants in five years.
In the Adviser Ratings’ Musical Chairs report for the third quarter of 2023, the research firm said there were 122 new arrivals between 1 July and 30 September 2023 compared to 91 in the previous quarter.
Looking at losses, 251 advisers ceased during the quarter while licensee switching activity was high, rising from 418 in Q2 to 521 in Q3. However, the research house noted this may coincide with job decisions advisers make at the end of the financial year as Q3 saw the highest switching activity in 2022 as well.
“While there were still more exits than entries, the gap between the two figures has continued to narrow.”
Breaking it down by which licensees saw the most movement, Count gained 21 while InterPrac gained 20, followed by Alliance Wealth in third place with 12 advisers gained. Lifespan Financial Planning, LFG Financial Services, and Financial Services Group Australia all reported gains of 10.
Eight of the top 10 firms to report the highest adviser gains were privately owned licensees, and almost two-thirds of advisers now work at a private licensee.
“After several quiet quarters, we saw an uptick in corporate activity in Q3. Count’s acquisition of Affinia moved an additional 19 advisers under the Count Financial umbrella. The growing privately owned licensee also added three new advisers from Fitzpatrick Wealth.
“InterPrac also continued to attract new advisers from a variety of AFSLs with the mid-sized licensee picking up practitioners from nine licensees.”
Count could gain more next year if the planned acquisition of Diverger goes ahead next February.
NextGen Financial Group lost 33 advisers but the firm was wound up in September after being ordered to pay $270,000 for an unpaid AFCA determination. Adviser Ratings said many of these advisers then ended up at LFG Financial Services.
Following NextGen was Affinia with 27 losses and Bridges Financial Services with 26 losses.
Adviser Ratings said licensee activity was quiet during the quarter with fewer than 10 opting to cease business.
However, at least two of these had been operating for over 10 years.
Some 55 advisers opted to commence their own licensee over the three months, divided between 39 who had two to five advisers in their practice and 16 who started solo licensees.
Of those starting a new licensee, 19 had previously worked at a diversified licensee, such as Lonsdale Financial Group or AMP Financial Planning, while 31 came from another privately owned licensee.
The ones who had always planned to leave have gone. The ones who always planned to stay and fight through these changes are mostly still here and quietly getting on with serving their clients. There should really be no surprise that the exit numbers are dwindling.
21 ceased last week. Still think we settle on 14,000 the retirement wave has a way to go yet, based on ASIC figures that will account for 1500-1900 over next 2-4 years. 15 years to recover numbers.