With adviser numbers having fallen below 16,000 for the first time this year, there has been a similar decline in the number of licensees.
According to Adviser Ratings, there had been a move for advisers to opt for solo or boutique licensees rather than big licensees.
This had contributed to the privately-licensed segment taking up a much larger proportion of the pie than before.
Two in three advisers now operated under the private model, Adviser Ratings said.
However, the overall volume of AFSLs had been steadily dropping since 2017 and dropped below 2,000 last year.
Looking at licensee segments, there had been steep declines in the limited licensee market.
Between 2020 and today, the number of limited licensees fell 77% as accountants who worked on self-managed superannuation funds exited the market after updated educational and regulatory requirements.
According to Chartered Accountants ANZ, the limited licensee model was “unworkable” for its members.
Other declines were seen in bank licensees, industry super funds/not-for-profit licensees and stockbrokers.
Since 2017, the number of industry super funds/not-for-profit licensees had fallen by almost a third while diversified licensees fell by 29% over the same period and stockbrokers fell by 22%.
Adviser Ratings described the changing footprint as a “seismic shift” in the market.
“Not long ago, the licensee market was a magnet for some of the biggest and most powerful players in the wealth space, as well as others who wanted to participate with more limited scope.
“In the past few years, however, there has been a seismic shift, most notably with the banks all but exiting the licensee arena. The presence of banks in advice has dropped more than 80% since 2017, with just a few hundred advisers now officially falling under bank licensees.
“More recently, we’ve seen other big players following suit, by either leaving the licensee market completely or drastically reducing their presence.”
