How many advisers will be there in 2022?
The industry might see a number of active advisers fall to around 17,227 at the start of the next year from approximately 18,500 as at the start of December, according to Wealth Data.
This would mean that 1,345 additional advisers would drop off the Australian Securities and Investments Commission (ASIC) Financial Adviser Register (FAR) on top of the 2,065 who have been taken down from the register year-to-date.
“We expect the numbers to start dropping off progressively over the coming weeks and into the New Year. We also believe that the number of advisers will continue to decline in 2022, to between 15,000 and 16,000,” Wealth Data’s director, Colin Williams, said.
However, he warned it would be tricky to work out the number of advisers who had failed the Financial Adviser Standards and Ethics Authority (FASEA) exam twice or more in 2021 and who, therefore, would retain the right to keep practicing as advisers until they passed the exam to September, 2022.
“We came to the conclusion that 1,444 advisers fall into this category,” Williams said.
According to Wealth Data, the vast majority of new advisers who commenced since 2019 were provisional advisers (some may now be an adviser in their own right) passed the exam. At the same time, FASEA’s data stated that “over 15,500 are recorded as active [advisers] on the FAR”.
“By adding in the new advisers, we estimate that the total number of advisers who have passed the exam and current is 15,783 as of 9 December, 2021,” Williams said.
Source: Wealth Data
He stressed that not everyone who had passed the exam was a current adviser as per ASIC’s definition.
“We are assuming that the vast majority of advisers (90%) who have failed to date will have failed twice. It would have been in the interests of most advisers who failed once to at least have one more go before year end and therefore build a buffer of time before exiting or having another go,” he said.
Source: Wealth Data
Having estimated the number of advisers who had failed at least twice and were on the ASIC FAR to be 1,444, Wealth Data added this total to the total of a number of advisers who had passed and current, 15,783, which gave a grand total of 17,227.
“Currently we have 18,572 advisers, indicating a loss of some 1,345 advisers between now and the ASICs reporting during January,” Wealth Data’s director stressed.
“There has been some guess work around the data with regard to calculating the number of advisers who have failed twice and therefore remain on the FAR.
“However, even if the estimates are not close, the variance overall would not change substantially as the bulk of advisers have already passed the exam or resigned. We could see some further heavy losses if major groups pull out of advice.”
Source: Wealth Data
AUTHOR
Oksana Patron
Recommended for you
ASIC has banned a Queensland adviser from providing financial services for five years after failing to provide appropriate advice that was in the best interest of his clients.
Minister for Financial Services, Stephen Jones, has said it is not a “backdoor attempt” by the government to allow the new class of adviser to provide full advice.
The financial advice industry has seen a net loss after 10 consecutive weeks of net growth in adviser numbers, according to Wealth Data.
Only 11 per cent of financial advice practices have said they are including crypto products on their approved products lists, according to CoreData.
