This week, the Australian financial advice profession navigated a complex interplay of pragmatic regulatory relief and renewed concerns over adviser sustainability. A significant "no-action" position from ASIC on fee consents provided a welcome, if temporary, reprieve, acknowledging the impending Delivering Better Financial Outcomes (DBFO) reforms. However, this was set against a backdrop of declining adviser numbers and predictions of further departures, highlighting the fragile state of our profession's capacity. As industry bodies held their crucial first meetings with the new Assistant Treasurer, Dr. Daniel Mulino, advisers continued to prove their value as emotional anchors for clients navigating volatile markets, underscoring the critical need for a stable and accessible advice sector.
Regulatory Pressures & Industry Response
The regulatory environment delivered a dose of much-needed pragmatism this week. In a significant move, ASIC granted a limited, forward-looking no-action position for advice firms with deficient ongoing fee consents. The regulator acknowledged that requiring firms to remediate issues with a consent framework, which is set to be replaced under the DBFO reforms, would be an inefficient use of resources. This decision provides temporary relief for licensees who may have failed to meet all technical requirements for client consent forms, preventing costly remediation programs for a system on its way out. While welcomed, the relief is time-bound and contingent on the passage of the DBFO legislation, keeping the pressure on the government to finalise the reform package.
The industry’s focus also turned squarely to political engagement. The Financial Advice Association Australia (FAAA) held its first formal meetings with Dr. Daniel Mulino, the new Assistant Treasurer and Minister for Financial Services, stating that the minister strongly supported the DBFO reforms. These initial meetings are critical in building a working relationship to ensure the profession's voice is heard as the government finalises its legislative agenda.
On the superannuation front, compliance deadlines are looming. Trustees have been urged to fix any defective ongoing fee arrangement (OFA) consents by September to avoid regulatory breaches. Meanwhile, the industry continues to await a decision on a potential debt waiver for legacy pensions, causing ongoing uncertainty for a small but important cohort of retirees. The debate around the proposed Division 296 tax on superannuation balances over $3 million also continued, with industry bodies refuting claims made during the consultation process, particularly around the tax's impact on SMSFs.
Practice Management & Growth
After several weeks of cautious optimism, adviser numbers took a step back, highlighting the profession's ongoing capacity challenge, with a net drop of 10 advisers for the week, bringing the total to 15,602. A symbolic milestone also marked the week, as the Commonwealth Bank formally ceased its last remaining AFSL, officially marking its exit from the financial advice industry. Compounding these concerns, one licensee head predicted that up to 1,000 more advisers could depart by the end of the year, citing regulatory fatigue and burnout as key drivers.
This contraction contrasts with the continued consolidation and expansion among privately-owned firms. Link Wealth continued its national growth strategy, acquiring a boutique Queensland firm as it builds its presence up the east coast. This trend underscores a broader structural shift where scale, efficient operating models, and a clear value proposition are becoming crucial for survival and growth.
The challenge of talent retention and client succession is also becoming more acute. New analysis warns that wealth managers face an imminent "flight risk" of next-generation clients and younger advisers who feel traditional models are not meeting their needs. This reinforces the need for practices to innovate their service offerings and create clear career pathways for new talent. Amid these pressures, a timely reminder emerged for practice principals that "done beats perfect" when it comes to strategic business planning, urging advisers to implement and iterate rather than wait for ideal conditions.
Client Engagement & Retention
This week provided powerful evidence of the tangible and intangible value advisers deliver. Fresh research from MetLife revealed that advised Australians are significantly more optimistic about their retirement prospects than their unadvised peers. Those with an adviser were more likely to feel prepared for retirement, confident in their financial plans, and less stressed about their financial future—a crucial proof point for the profession's impact.
Beyond the numbers, the role of the adviser as an "emotional anchor" during market uncertainty was highlighted as a core component of the value proposition. With clients facing geopolitical events and market volatility, experts noted that managing client behaviour and providing context is as important as technical portfolio management. This behavioural coaching helps clients stay the course and avoid costly, emotion-driven decisions.
The debate around advice accessibility also continued, with a strong argument that retirement advice provided through superannuation funds will be a crucial mechanism for closing the advice gap. Proponents argue that while it may not be as comprehensive as holistic personal advice, it provides a vital service for millions of Australians who would otherwise receive no guidance at all, aligning with the core objectives of the DBFO reforms.
Technology & Innovation
The integration of technology, particularly artificial intelligence, continues to be a defining trend for the future of our profession. A new report from PwC found that the financial services sector is leading all other industries in Australia when it comes to the demand for AI-related jobs. This indicates a profound strategic shift. AI is no longer a peripheral tool but a core capability driving hiring, investment, and operational strategy within financial institutions and advice practices.
This trend is a direct response to the pressures of efficiency in the industry. With tight adviser numbers and high compliance costs, practices are increasingly turning to AI and automation to handle administrative tasks, streamline client onboarding, and assist with research and compliance checks. This allows advisers to redirect their focus toward the high-value, relationship-driven work that clients value most and that technology cannot replicate. As seen in previous weeks, the successful adoption of these tools is fast becoming a key differentiator for profitable and scalable advice businesses.
Context and Looking Forward
Current Significance:
This week crystallises the profession's most acute challenge yet: an immediate existential threat to nearly 30% of advisers who haven't met qualification standards by January 2026, occurring precisely when political advocacy capability has been weakened by Jane Hume's removal from Coalition leadership. The appointment of Pat Conaghan, who lacks an economic background, to shadow financial services represents a significant knowledge gap at a critical policy juncture. However, the FAAA's breakthrough guidance on tax deductibility of advice fees offers genuine progress on accessibility, potentially addressing the stark reality that only 6% of Australians will pay current market rates while practices need $4,000 annual fees for viability.
The contradiction between robust M&A activity (LGT Crestone's $5 billion acquisition achieving 93% client retention) and minimal new adviser entrants (only four this period) underscores a maturing market where scale and capability increasingly determine survival, consistent with the "super firm" consolidation trend observed throughout 2025.
Forward Outlook:
The January 2026 compliance deadline will likely trigger the most significant single adviser exodus since the Royal Commission, potentially reducing numbers below 12,000—a devastating blow to accessibility. However, this crisis may accelerate the industry's structural transformation, with AI-enabled practices (now 74% adoption rate) positioned to capture displaced client relationships. The tax deductibility breakthrough provides a critical tool for surviving practices to demonstrate value and justify fees. Political uncertainty around DBFO implementation will persist until clearer Coalition policy emerges, though fundamental reform momentum appears unlikely regardless of leadership changes.
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