How many more adviser departures could the industry see?
The industry could lose as many as 3,500 advisers in the coming years, according to the latest Adviser Ratings’ Landscape Report.
The firm’s annual report, due to be released later this month, covered topics including advice demand, advisers’ intentions, practice, health and profitability.
The financial advice industry had fallen by more than 12,000 in the past few years following changes implemented as part of the Hayne Royal Commission.
In 2019, the number of advisers was close to 28,000 but had declined in the past four years to 15,800.
While figures had stabilised somewhat since the deadline passed for current advisers to pass the financial adviser exam last September, the report found many still remained on the fence about their future in the industry.
Some 1,500 advisers said they intended to leave the industry and a further 2,000 said they were “unsure” of their future.
A big factor would be the outcome of the “experience pathway”, which lets advisers who have passed the exam, have 10 years of experience and have clean practice records remain in the industry without completing the necessary degree.
This had been a contentious move, with some praising the option and others feeling they were a “carve-out” of the stringent education requirements.
It had since been purported by the current Labor government that the pathway could be scrapped, but minister for financial services, Stephen Jones, had stated he would investigate how standards could change to recognise experience.
“We’re told the wait for certainty about what will happen with education requirements — specifically, experience recognition — is creating anxiety among advisers.
“Jones has remained committed to keeping the adviser exam but said Treasury would look at whether improvements could be made, such as reducing the number of questions. The consultation process also looked at how to attract new advisers to the profession at a time when numbers are quickly falling.”
AUTHOR
Laura Dew
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My advice to students is DON'T BOTHER to study financial planning because there are NO ENTRY LEVEL JOBS in the industry. I completed a GradDipFinPlan with a distinction average last year and applied to more than 500 employers Australia-wide but failed to land a position. Complete waste of time and money. I've gone back to working as a school teacher,
The lack of support from government and in particular FASEA with the Professional Year has ensured that the industry will fail in future with no new entrants replacing those that will exit over the next decade.
Why would anyone want to be a financial adviser when ASIC allows people to give financial advice over social media without the need for these "advisers" to have any education, compliance or insurances. What even worse is that if these social media "advisers" are ever caught by ASIC, all that ever happens to them is that they are banned from giving advice in the future. They were already not allowed to give advice so they get in no trouble. No fines, no jail time no nothing. Whereas if a qualified adviser gives advice and doesnt complete a Statement of Advice document to a certain standard then that adviser can be banned and fined.
Becoming a financial adviser is a waste of 5 years of study and 40 years of compliance.