Only five years ago, 10,000-odd advisers – more than a third of the market – fell under licensees owned by the major banks, AMP or IOOF. If we fast-forward to today, it’s a very different picture, with just a couple thousand advisers operating under a Big Six licence.
As we reach the second half of 2022, it’s really only AMP and Insignia Financial (formerly IOOF) remaining, with fewer than 200 advisers under the bank-owned licensees collectively.
To break that down further, Westpac has left the licensee market completely, while NAB has 96 remaining advisers, ANZ has 49 and Commonwealth Bank has just 24.
Figure 1 – Big institutional licensees: 2016-present
Source: Adviser Ratings
Since the virtual exit of the banks, there have been persistent questions about when exactly they’ll make their return to wealth – and in what capacity. Industry pundits have speculated digital advice or scoped/general advice delivery are likely next steps. Few predict a return to owning licensees.
Where AMP and Insignia stand
With the departure of the banks, AMP and Insignia Financial now have the biggest institutional footprints in wealth, with almost 90 per cent of institutionally licensed advisers falling under the umbrella of one of the two.
Figure 2 – Licensee owners’ market share
Source: Adviser Ratings
As Figure 2 shows, AMP licensees accounted for about a third of the Big Six market share in 2016. Now, its licensees cover almost half of the advisers under an institutional licensee.
However, looking at the raw adviser numbers, AMP licensees cover just a third of the advisers they once did – down from 3254 in 2016 to 1033 today.
Following the NAB/MLC deal last year, Insignia Financial now covers a similar proportion of the institutional market to AMP, with its adviser numbers up from 934 in 2016 to 1119 this month.
Both AMP and Insignia Financial made written submissions to the Quality of Advice Review last month, with the former backing standardised fee consent arrangements and an ASIC/industry rethink of Statements of Advice to “continue to protect the consumer whilst being a document that is more consumer friendly”. AMP also asked for shorter disclosure letters for one-off advice and a revision of life-insurance commissions.
Meanwhile, Insignia Financial similarly argued that advice documentation needs to be reviewed, while also recommending the regulation of financial coaching and the issuance of practising certificates, much like those solicitors and accountants receive.
Read about Adviser Ratings’ submission to the Quality of Advice Review here.
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