Year In Review: How The Adviser Landscape Looks At The End Of 2022

While adviser numbers dropped below 16,000 for the first time in 2022, there is cause for cautious optimism as we finish the year, with signs the annual exit rate has finally slowed.

In 2021, more than 4000 advisers left the profession, but in the year until last week, there were just over 1000 exits. While that is still a lot, it’s a quarter of what we saw the previous year and several thousand fewer departures than there were in the prior two years.  

We still predict the workforce’s numbers will fall further, as consumers continue to grapple with the impact of having 12,000 fewer advisers than there were in 2019. Research from our most recent Landscape Report indicates 100,000 consumers either stopped seeing an adviser or were orphaned as affordability concerns have continued to dominate.

As we close out the year, advisers who remain in the profession have now passed their exam hurdle and many are well into other education requirements as we await further word on changes to experience recognition. Adviser Ratings analysis shows around 10,000 advisers would become qualified if the experience standard recognised advisers with 10 years’ experience in the last 12 years.

Changes to the licensee landscape

In the last five years, we’ve seen numerous changes to the makeup of the advice market, with today’s advisers largely occupying the growing privately-licensed universe, which now makes up almost two-thirds of licensees.

Figure 1 – Shrinking workforce: Adviser numbers



Source: Adviser Ratings. Note: Covers period to December 15, 2022.

Amid this private licensee growth, we saw the continued contraction of other parts of the licensee market in 2022 – especially limited licensees and banks. As Figure 3 indicates, banks have gone from covering almost a quarter of the market in 2017 to 2 per cent in 2022, as they wind up their remaining presence.

Figure 2 – Licensee distribution by segment



Source: Adviser Ratings

Figure 3 – Licensee segment distribution change over time



Source: Adviser Ratings

In terms of individual licensees, many of the gains and losses happened as a result of M&A activity. For example, Ord Minnett recently picked up E. L. & C. Baillieu, while WT Financial Group bought Synchron earlier in the year.

Notably, a conflict-of-interest scandal sent Dixon Advisory into voluntary administration in January, while AMP Financial Planning continued to lose advisers to other licensees.

Figure 4 – Licensee gains and losses



Source: Adviser Ratings

While the 2022 calendar year brought significant changes to the advice landscape, next year could be an even bigger one for advisers, with the confluence of promised experience reforms, possible tax-deductibility changes to adviser fees and the potential implementation of Quality of Advice Review recommendations.

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