Today marks the public release of one of the most comprehensive reports on the financial advice landscape ever undertaken in Australia. The 2018 Financial Advice Landscape Report provides a unique view of the advice ecosystem in 59 regions across Australia. The report incorporates Adviser Ratings’ proprietary data, census data, and results from an online survey conducted in Nov-Dec 2017 responded to by 1,103 financial advisers.
Fig. 1 2.4 Million Australians (13.9%) are advised (percentages represent number advised in each age cohort)
The report (as featured in the Australian Financial Review) provides a wealth of information for advisers, not only detailing Australia-wide industry trends, but also providing invaluable benchmarking data for those advisers and firms who want to see where they sit compared to other advisers around Australia as well as within their own local communities. Analysis in the complete report has been segmented into 59 regions across Australia, which provides a snapshot of key metrics for advisers to evaluate themselves against.
The last 5 years has seen significant disruption in the financial planning and investment advice industry including regulatory changes driven by FOFA, the creation of FASEA, the sale of major banking wealth management arms and the consolidation of several major insurers in the life insurance space. Add to this the current Royal Commission into banking and one can expect continued instability in the foreseeable future.
The report identifies key industry trends including the rise of managed accounts and the mass migration of advisers away from bank owned and aligned licensees. This adviser migration is linked to a rapid increase in privately owned licensees that has fuelled growth in total licensees by 33% in the last 3 years alone.
Technology is also having a considerable impact enabling and disabling incumbents and new players. There are now more than 100 start-ups focused on the superannuation, wealth and life insurance market ranging from auto-investing to claims management to aged care marketplaces to superannuation balancing.
Adviser movement, the resultant changes in the channel mix for delivering advice, and technological change have simultaneously stimulated and complemented the opportunity for competition among new platform providers in the advice space, with many incumbent providers who currently enjoy market dominance recording high levels of dissatisfaction among over 1000 advisers who were surveyed as part of the report. Existing technology platforms are reforming their offerings, as evidenced by the recent share market listing of netwealth in attacking the investment platform space.
The report also identifies a $900-Billion-dollar transfer of advised wealth that is likely to play out over the next 5 years, in part due to advisers transitioning out of the industry. This fact, along with analysis that indicates over half of the $2.8 trillion-dollar superannuation market is unadvised (with similar figures in the $700 billion dollar SMSF market) shows that in spite of the upheaval and change currently taking place in the industry, there is abundant opportunity for advisers and firms who are well positioned and equipped to take advantage of the current flux.
Fig. 2 Advisers switching between licensees - 60% of advisers in transition are switching to privately owned licensees
Regional analysis in the report helps identify key parts of Australia that are under-serviced by advisers as well as industry and benchmarking metrics like average number of clients per adviser, number of advisers per capita, average FUA and in-force premiums per adviser and practice, penetration and NPS rate of platforms and software providers, as well as economic and demographic statistics.
Adviser Ratings would like to thank Jerry Parwada, Professor of Finance at UNSW Business School for his assistance in compiling the report.
Those advisers who participated in the survey will be able to access and download their regional snapshot report from Friday.
Fig. 3 Some of the Licensees that are examined in detail in the report
As a special offer for advisers, anyone who would like a copy of their regional snapshot report, but who missed out on the original survey, may participate in the survey here. The survey took an average of 10 minutes to take. The 10 page regional snapshot reports that will be made available to participating advisers will include information similar to this, for the Adelaide - Central and Hills Region.
Advisers or firms wishing to purchase one of the 59 regions (from $300) or the entire report, can contact Adviser Ratings CEO Wealth Mark Hoven at email@example.com
See the Research Report Contents: Here