After years of adviser departures, the professional landscape is starting to look more promising, with signs the nadir is in sight. The number of active advisers now stands below 16,400.
Unsurprisingly, most adviser exits came in December, as the initial deadline for passing the exam approached. Advisers who have twice failed still have until October this year to pass. After that, we expect the exit rate will naturally slow further.
June is typically a popular time for advisers to exit, partly to avoid the ASIC licensee levy. While the rate of new entrants is still slower than we’d like to see, the second quarter of this calendar year saw the highest number of newcomers since 2019. We’re also seeing paraplanners starting to migrate across.
Meeting the demand
Part of the reason we expect the advice profession to grow is the unwavering and increasing demand from consumers.
Since the Hayne Royal Commission and the pandemic, the demand from consumers seeking professional advice has soared.
Amid this, business valuations are holding up well, but we’re continuing to see changes to licensing.
How the licensee landscape is changing
Some licensee segments are losing numbers at a much quicker pace than others, which reflects how the landscape is evolving.
The once-popular limited licensee model lost more than 60 per cent of its advisers in the past financial year. From a height of 1385 in 2018, there are now fewer than 240 delivering advice under this form of licence. We’ve been told the combination of professional standards and ongoing costs has made the model unfeasible for many.
Similarly, fewer than 300 advisers are still licensed by banks, compared with more than 5000 – one-in-five – in 2017, as banks continue to wind down their licensee presence.
The vast majority of advisers are now under privately-owned licensees, with boutiques particularly popular. In fact, small, private licensees lost just 5 per cent of their advisers in the past financial year, while every other segment recorded double-digit losses. At the end of the last quarter, one-in-four advisers was licensed by a private boutique.
Figure 1 – Change in adviser numbers by licensee segment
Source: Adviser Ratings
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Comments2
"Hi Tim - We sure do. I've emailed you this list you've requested just now."
Stacey - Adviser Ratings 14:20 on 15 Jul 22
"Have you got a list of stockbrokers , as in how many at which firms ? Thankyou in anticipation."
tim weber 15:53 on 13 Jul 22