There is just one month left until the education requirements kick in, and Padua Wealth Data has predicted that a loss of 900 advisers would be the “best case” scenario.
Based on a point-in-time analysis of the Financial Adviser Register (FAR), Padua Wealth Data founder Colin Williams found that 5,179 advisers currently intend to use the experience pathway.
For those who don’t qualify, advisers are required to meet a higher standard of education and successfully pass the ASIC adviser exam in order to continue operating after 31 December 2025.
According to the analysis, 6,469 advisers have declared on the FAR that they won’t be using the experience pathway, 91 per cent of which meet the incoming education requirements. The combined 11,648 advisers are expected to continue operating into 2026.
However, the remaining 3,811 advisers have yet to indicate on the register which pathway they intend to rely on, if they intend to stay in the profession at all.
Of this group, 1,523 advisers potentially qualify for the experience pathway, and an additional 1,396 advisers have qualifications that Williams said indicates they may progress toward 2026, though he said this group remains highly uncertain.
While incomplete records make it challenging to determine how many advisers may exit as a result of the new requirements, Williams said the “best case” would see 892 advisers leave the profession, bringing the total down to 14,567.
“When a series of ‘what if’ scenarios are performed, the net loss can easily jump in excess of 1,600. Adding together the most realistic outcomes across all categories the net loss range will be between 1,100 and 1,500,” Williams said.
If 1,600 advisers were to leave, this would bring the profession down to just 13,859.
Though, Williams noted that there are some factors that could impact this number considerably.
Namely, he said December traditionally sees a resignation spike and experience pathway advisers could fall short of their requirements due to service period being checked. It is also likely that there will be last minute FAR updates as the deadline approaches which would disrupt the current predictions while the November financial adviser exam results could see a surge of new entrants to combat some of those expected losses.
Some of the losses may also be temporary as advisers have the option of dropping off the FAR ahead of the deadline in order to complete their education requirements and later rejoin the profession.
The FAAA revealed in August that this loophole allows advisers to avoid the need to redo their professional year (PY) as those who remain on the register but don’t meet either requirement will be required to do so in order to continue practicing once they complete their education.
Although there is still some hope, Williams said a significant drop in advisers would create a number of challenges such as increasing the client load of the remaining advisers, creating longer turnaround times for clients, further exacerbate the advice accessibility issue and put increased pressure on the cost to serve.
Weekly movements
Looking at the weekly movements, the profession saw a net gain of just one adviser in the week ending 27 November, bringing the total to 15,459, bringing the net change for the calendar and financial year-to-date to a loss of 12 and gain of 289, respectively.
With the addition of 10 new entrants, this signals the loss of nine experienced advisers this week, building on growing concerns as some career advisers look to exit in the coming weeks.
Meanwhile, two licensees commenced operations this week while none ceased. Some 27 licensees all saw a net gain of just one adviser, including Spark Partnership Group, Shartru, Rhombus and both new licensees.
This marks another week of small shifts after the week ending 20 November also saw no licensees with a net gain of more than one adviser.
At the other end of the spectrum, Sequoia Group was down by net three advisers after one left to start their own licensee while the remaining two are yet to be appointed elsewhere.
Four licensees lost net two advisers each, including Godfrey Pembroke with both switching to Findex, Cobalt Advisers which saw one move to RI Advice, River X losing one to Advisory Circle, and Capstone, with the rest of the advisers yet to be reappointed elsewhere.
A short tail of 14 licensees lost net one adviser each, including Entireti, Finchley and Kent, and Shaw and Partners.
Among those that gained net one adviser this week was Centrepoint, pulling in close as the third largest advice group with 587 advisers, falling just behind Count Limited with 589. Entireti and Akumin Group remains the strong frontrunner at 1,104 advisers under its AFSL.
The industry is over regulated and badly regulated, too much red tape and the risk reward doesn’t make any sense.
Once again yet another article lumping all “advisers” together rather than delineating investment planners and risk specialists. How many times do magazine editors, journalists and politicians have to be told they are completely different disciplines? Where’s the real analysis with the stats and split between them? You’ll find a large percentage of the so-called “advisers” that will exit next year will be risk specialists.
The effect of losing these advisers will have different repercussions on clients than investment planners deserting them. Why isn’t this covered by the media? Is it even understood by the media? If so, why no reporting on it? The risk advisers are being run out of the industry by the pseudo-clandestine actions life companies (go figure!) and the politicians complicit with life companies responsible for the inappropriately LOW commissions and intolerable 2 year responsibility period AND the over zealous and misdirected educational requirements which are completely inappropriate and irrelevant to risk specialists.
The media and politicians then go and panic, clutching their pearls, feigning confusion and surprise that advisers are leaving and arranging ‘surveys’ to try to find out why. Experienced risk advisers TOLD life companies and the media EXACTLY what would happen if these things were done – over 10 years ago they were told – and each year all over again. All that is happening NOW. Well intelligentsia, time to pay the piper in 2026. Of course, none of these suspects will suffer – it will be the advisers and, as always, the poor hapless clients. So much for the charade of client best interest from the pollies and life companies!
Oh well, here comes the new era of direct sales from life companies . . . no more pesky commission to pay, this is easy now . . . wheeee!
Why hasn’t anyone looked at why the year has been set to 2021? One would have thought that something closer to the date of the deadline would be more appropriate given that they have been providing advice up until this arbitrary deadline?