How many advisers could we see in 20 years?
There are four possible scenarios for the adviser exit pathway to take going forward, according to Rainmaker Information, ranging from an outcome of zero advisers to 12,000 advisers.
Currently, there were 16,203 advisers on the Financial Advisers Register (FAR), down from over 26,000 in 2019. This was in contrast to a rise of 8,500 advisers between 2015 and 2019.
Last week, it was announced there had been an exit of 172 advisers from the industry and gains of 23.
If exits continued at this pace, there could be zero advisers in five years, Rainmaker said, which was scenario one.
Alex Dunnin, executive director of research at Rainmaker Information, said: “All projections for adviser numbers point to no recovery without profound structural industry policy change”.
However, there were three other possible scenarios which would see the adviser number remain in positive territory.
Scenario two, which ignored the boom-bust period between 2015-2022, posited there could be about 12,000 advisers in 20 years.
Scenario three posed what could happen if the rate of percentage fall continued at its three-year levels that averaged a loss of 14% and would see less than 5,000 advisers in 2029.
Scenario four postulated that if the number of registered financial advisers fell only 5% p.a., by 2042 there would be 6,000 financial advisers practicing in Australia.
“While these are predictions at this stage, they serve a purpose; they reinforce that the current trend of advice industry exits is so baked-in that it is naïve to expect a recovery in financial adviser numbers anytime soon,” said Dunnin.
“This irony is that while financial advisers are strategically less important, the successful remaining ones are now much more important because in a wealth management market that is violently disrupting, funds managers need effective financial advisers more than ever.”
AUTHOR
Laura Dew
Recommended for you
Following an extraordinary general meeting today, Dixon Advisory parent company E&P Financial Group’s shareholders have voted on its proposed delisting from the ASX.
While overall financial adviser numbers have dipped below 15,500 this week, Rhombus Advisory is experiencing growth and approaching 500 advisers in its ranks.
Iress’ Xplan continues to dominate the financial planning software market with a multitude of uses, according to Netwealth research, despite newer players battling for a piece of the pie.
ASIC has shared the percentage of breach reports related to financial advice in FY24, noting increased reporting by smaller AFSLs.
Wow Hedware, I don't think we've ever agreed completely before. Is the world is turning upside down, or is this another Hedware?
Your comment regarding professional associations is especially on point. And to another comment in this blog, provided we can find the people, we need more advisers not less such is the demand for quality advice.
Where I presume we adopt our normal roles is if we get to the topic of advisers funded by product providers (banks and union funds) but we'll leave that for another day.
Have a good one.
along the lines of the CPA ? the CPA is not even an AQF-recognised qualification, it's a designation only. the association is a joke in the accounting profession.
only the chartered accountants (AQF 8) and Institute of Public Accountants (AQF 8 & 9) offer a "qualification" and designation combined and recognized under the Australian Qualifications Framework.
all of the accounting programs require only 50% to pass. the CFP I completed required a 65% pass in all subjects the exam was 67% in the cohort I completed. so promote the CFP as the gold standard.
I was only referencing CPA in terms of its extensive marketing campaigns promoting the value of CPAs that rang strongly with businesses and individuals.
What a ridiculous article. These people cannot predict what 20 weeks will bring never mind 20 years. Just look back to say 2012 or 2015 and see what was written about the future of the profession and industry. I wonder which special interest group this sort of information is serving?