There remains a “strong appetite” for solo operators in the financial advice space, according to the latest quarterly Adviser Ratings’ Musical Chairs Report.
In its latest report, the firm said 57 per cent of new Australian financial services licences in the final quarter of 2023 were applications from single advisers.
Some 17 came from one adviser, and 13 came from firms with two to five advisers.
Over the past year, privately owned licensees have seen an increase in adviser numbers, with the largest seen on those with 100-plus advisers which grew by 4 per cent from 2,974 in December 2022 to 3,095 from December 2023.
All other licensee types reported a decline, with the largest seen in diversified firms, which fell 16 per cent from 2,727 advisers to 2,280 at the end of 2023.
There were 462 advisers switching licensees during the quarter, slightly less than in the previous quarter when 521 advisers moved, but in line with figures throughout the year.
“Most of the movement happened at an individual level, with advisers finding new homes that align with their objectives. The major exception was the shift of more than two dozen advisers from formerly TAL-owned Affinia Financial Advisers to Count Financial.
“With the silly season behind us and advisers focused on new year goals, we expect to see a seasonal uplift in licensee switches in Q1. However, it’s unlikely to hit the heights of 2019 and 2021 which were driven primarily by frenzied corporate activity and the great shift in advisers to the private market.”
Activity in 2019, as referenced, was the highest in five years with over 3,000 advisers moving during the year.
As well as the deal with Affinia, Count is scheduled to acquire rival licensee Diverger in March, which Adviser Ratings said will create a “licensee juggernaut”, having already gained 21 advisers during the fourth quarter.
The Count-Diverger merger was approved by Diverger shareholders last month and scheduled to take place in early March.
Looking ahead at the outlook for 2024, the firms noted that a big challenge this year would be cost pressures upon them.
“While inflation has steadied at a headline level, advisers anecdotally report cost pressures are still hitting their practices. We expect this to translate into further fee rises, as businesses try to delicately balance meeting client needs with practices’ growth and sustainability.”
