New adviser retention makes positive recovery
The number of new entrants in the financial advice profession who have since departed this year has seen an improvement from the amount that left in 2023.
Wealth Data analysis has assessed the number of new entrants that joined the Financial Advisers Register (FAR) in the first three quarters of 2023 compared to 2024.
Last calendar year saw 95 new entrants join in Q1, 93 in Q2, and 131 in Q3 – equalling 319 in total for the first three quarters.
This year’s numbers have proven to be similar, with 85 entering in Q1, 94 in Q2, and 125 in Q3 – totalling 304 new advisers.
The research house also examined the number of new entrants that have departed the industry. Within the 2023 total figure, 33 new entrants have since ceased from the FAR, meaning 10.3 per cent have left.
Meanwhile, only five of the new entrants that joined in 2024 have exited, equalling 1.6 per cent and marking a reduction from the previous year.
The improvement in the number of new entrants who have ceased is likely due to advice firms’ greater efforts to retain their recent hires, which includes setting out clear pathways for career progression and fostering an enjoyable workplace culture.
Despite the positive progress, Wealth Data founder Colin Williams recognised: “This data highlights the challenges firms face in keeping new hires for one year.”
Anne Palmer, general manager for education and professionalism at the Financial Advice Association Australia, previously told Money Management that while it is common for young workers across all industries to want to change careers, it comes at a critical time for the advice profession.
“There is a general trend of younger aged workers being more likely to change careers, which isn’t limited to financial advice. For example, a survey by RMIT Online in September 2023 showed that one in four workers under the age of 30 in Australia were contemplating a career change,” she explained.
“However, this is playing out in financial advice at a time when attracting more people to the profession is crucial.”
Deloitte and Iress’ Advice 2030: The Big Shift report also revealed that 21 per cent of the 250 surveyed advisers said they were likely to switch careers or retire in the next 12 months.
Concerningly, three-quarters of those looking to depart were advisers aged under 40. Out of all under-40s surveyed, some 26 per cent said they intended to switch careers or retire in the next 12 months.
To improve this statistic, the report’s co-author John O’Mahony encouraged the advice industry to better convey the value proposition of being an adviser: “How attractive are you making it as a career or a business opportunity? If you aren’t making it reasonably attractive for people to enter, then you won’t have people doing so.”
AUTHOR
Jasmine Siljic
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