The latest statistics from Wealth Data have revealed an ongoing, strong growth in provisional advisers across the advice sector, suggesting that advice firms are more comfortable taking on new advisers.
In fact, in the week to 20 October, eight provisional advisers commenced, halting the adviser exodus, and limiting losses to only one adviser — with the final count reported at 15,916.
“This week’s small loss of just one adviser indicates that the adviser market has stabilised after the numbers fell dramatically at the start of the month,” said Wealth Data director, Colin Williams.
The movement of advisers year to date, shows that losses are still dominated by the large groups with Insignia leading the pack at a loss of 169 advisers, followed by AMP at 152, and WT Financial Group at 98.
Speaking to ifa about his recent key observations, Mr Williams said that while “it’s not particularly concentrated”, more firms are definitely hiring provisional advisers.
“It is vital for this to keep going as the profession will always lose advisers to retirement and others who may change careers,” Mr Williams said.
He explained that while advisers are often discouraged from hiring provisional advisers due to mainly commercial reasons, the practice is becoming much more commonplace.
“While the program for PAs may look complex and costly, as more firms take them on, everyone will learn and make the process that much easier,” he noted.
Also commenting on the latest data, Eugene Ardino, CEO of Lifespan Financial Planning, said that he is “extremely pleased”.
“With the mass exodus of advisers from the profession over the last four years, it has never been more important to try to attract new entrants and to have the infrastructure in place to work with them. This has been a real challenge for the profession with all the legislative change combined with difficult market and economic conditions, but hopefully we see some easing from a legislative change point of view in the short term,” Mr Ardino told ifa.
But Mr Ardino is concerned with the rapid exit of experience from the profession.
“Where we are relying on new entrants to rebuild the profession after numbers have almost halved over the last four years or so, we need experienced advisers to be able to provide mentoring and training so it is also extremely important that we look at strategies to keep experienced advisers around for longer,” Mr Ardino said.
“Policymakers and advice community leaders have much work to do in this space to recover from the damage done over the last five to 10 years or so that has led to where we are now,” he added.
He is, however, optimistic that this has been recognised and that the wheels are in motion to start making changes to both keep experienced advisers in the industry longer and to make the profession more attractive and stable to young people considering their future.
“But it will take time,” he cautioned.
As for whether he expects the positive trend of provisional adviser entrants to persist, Mr Williams expressed an optimistic view.
“I think so, the trend has been pretty consistent of late which is encouraging,” he said.
“I also believe that most practices are profitable and professional and can see clear benefits in taking on staff that they can train from the ground up.”
