Quarter of advisers to leave industry in next five years
Some 25% of financial advisers think they will be leaving the industry during the coming five years, research by Investment Trends finds.
The finding was included in Investment Trends’ 2022 Adviser Business Model report, which examined at the needs of Australian financial advisers and their business.
The report also found that the total cost of providing financial advice to the typical client has increased from $2,850 in 2020 to $3,280 in 2022. This is down to challenges such as regulatory change, the compliance burden and the need to provide affordable advice.
However, the research revealed that practice profitability has increased despite this, with 46% of financial advisers saying they were more profitable this year compared with 34% in 2021.
Investment Trends’ research director, Dougal Guild, said: “The more successful advisers appear to have better adapted to regulatory change and new technologies to address this cost/profitability issue.
“They primarily service wealthier clients and are prepared to pay for tech solutions to enhance their advice offering and bolster profitability.”
Investment Trends also reported that 37% of advisers planning to leave their licensee in the coming 12 months, of which 70% intend to go self-licensed.
The proportion of self-licenced advisers increased from 17% in 2017 to 35% in 2021, before dipping slightly to 31% in 2022.
“Decreasing NPS is in part driving the increasing number of advisers across both the ‘aligned’ and ‘majority independent’ segments intention to leave their current licensee to be part of a self-licensed practice,” Guild said.
Recommended for you
Net cash flow on AMP’s platforms saw a substantial jump in the last quarter to $740 million, while its new digital advice offering boosted flows to superannuation and investment.
Insignia Financial has provided an update on the status of its private equity bidders as an initial six-week due diligence period comes to an end.
A judge has detailed how individuals lent as much as $1.1 million each to former financial adviser Anthony Del Vecchio, only learning when they contacted his employer that nothing had ever been invested.
Having rejected the possibility of an IPO, Mason Stevens’ CEO details why the wealth platform went down the PE route and how it intends to accelerate its growth ambitions in financial advice.
