Initial analysis of adviser movements in Quarter 3 of 2019 has seen overall adviser numbers decline by around 700 individuals. This equates to a contraction of almost 3% of the number of people authorised to offer financial advice – which currently stands at 24,772 people. The number of advisers represented in the institutionally owned and aligned space continues to wither, dropping a further 2.5% from Q2. Currently, just over 42% of advisers in the industry are authorised by institutionally owned or aligned licensee’s, with the number authorised by privately owned licensees sitting on nearly 58%.
Adviser Ratings analysis shows that the proportion of advisers from institutions dropped from 14.5% in Q2 to 13.8% in Q3, aligned adviser numbers dropped from 30.1% to 28.4% and privately authorised advisers increased from 55.4% to 57.8% in the same period.
Because of the trend of increasing privately owned licensee’s, we’ve found it useful to categorise this group into segments based on their number of advisers. Interestingly, even though one or two of these segments gross adviser numbers slightly decreased, every one of these segments grew in terms of their percentage proportion of the industry because of the industry’s overall contraction in numbers.
There were 838 one person licensees (3.8% of the industry by adviser numbers), 2,500 advisers in 2-5 person licensees (10.1%), 1,702 advisers in 6-10 person licensees (6.9%), 2,367 advisers in 11-30 person licensees (9.6%), with the largest segment being the 6,916 advisers represented by 30+ sized licensees (27.9%)
Although total adviser numbers shrank by 700 over-all, there were actually 950 advisers who ceased to be authorised in the quarter. Only 10 “brand new” advisers were registered, continuing these diminutive figures since the new regulatory requirements were introduced at the beginning of the year. The difference between the ceased number and the overall reduction number is accounted for by over 240 advisers transitioning back into advice land after being previously ceased.
Our chart represents the top ten licensees in terms of gross additions and reductions of adviser numbers. Westpac’s Securitor and Magnitudes adviser transitions to the Viridian licensees can be seen in the growth in adviser numbers of Viridian Advisory and Viridian Select. AMP FP have a foot in both camps, adding 26 advisers for the quarter, but losing 70 as well. Financial Wisdom has shed nearly a quarter of their entire advice network in the last three months, following CBA’s announcement that the licensee will cease offering services by June next year.
We’ll continue to bring you more detailed analysis of adviser movements and industry trends in the coming weeks as part of the lead up to the release of our Q3 Musical Chairs report.