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Realignment key theme as education deadline losses come into focus

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8 April 2026 by Alex Driscoll, ifa

Article link: https://www.ifa.com.au/realignment-key-theme-as-education-deadline-losses-come-into-focus/

The final quarter of 2025 marked a period of “reckoning and realignment”, according to Adviser Ratings, with the full impact of the much talked-about education deadline becoming clear.

Outlined in its Adviser Musical Chairs Report for Q4 2025, Adviser Ratings revealed that the overall number of practising financial advisers at the conclusion of the quarter was 15,148, representing a net decrease of 299 – the largest decline since Q2 2024.  

“This contraction was overwhelmingly concentrated in December, when 413 advisers ceased their registration in a single month, as the 1 January 2026 education deadline triggered a wave of departures that the industry had been anticipating for years,” Adviser Ratings said.  

This marks the “most significant” single month departure since the height of the post-royal commission exodus. The 129 new entrants and 146 returning advisers offered some cushioning but were unable to offset the 574 cessations recorded across the period.  

As the report put it, “the net result was unmistakable: the education deadline had arrived, and its impact was both swift and material.”

“Key themes defining the quarter include the crystallisation of the education deadline into real departures, the continued bifurcation of the licensee landscape between mid-sized growth engines and contracting large-scale operators and accelerating M&A activity as practices respond to succession pressures and regulatory change,” the report added.  

This comes after many within the industry felt the education deadline had not been as bad as anticipated, with some estimates putting advisers exiting the profession due to this at well over 1,000.  

“The decline in numbers is much less than we had originally feared,” Phil Anderson, general manager policy, advocacy and standards at the FAAA told ifa earlier this year. 

“So, we’ve got all those who have already come off – and some may go back on – and then we’ve got those who appear not to be appropriate to have remained on. If you add the two of those together, it’s still not anywhere near as bad as we had feared it could be 

The Musical Chairs report also highlighted some industry realignment could emerge with the next tranche of the Delivering Better Financial Outcomes reforms, offering what Adviser Ratings called a “structural turning point for adviser entry pathways”.  

It stated that by removing bridging course requirements and broadening eligible degree qualifications, a more diverse pipeline of talent should begin entering the career from 2026 onwards.  

However, the report establishes that near-term outlook of the profession is shaped by the departures of Q4, with there being a need to absorb both the loss of experienced practitioners and the transition of their client books.  

“This is all occurring within a macroeconomic environment where persistent inflation, a cautious cash rate outlook, and rising asset prices create both opportunity and complexity for practices navigating this period of significant structural realignment and regulatory evolution,” the report stated.  

Other key highlights include 460 advisers who switched licensees in the quarter, the number of active licensees decreasing by 27 (16 new versus 43 ceased) and a total reduction in practices of 123.  

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