According to analysis from Wealth Data, the average years of experience for current financial advisers is slightly higher than that of the advisers to exit since the introduction of the Financial Adviser Standards and Ethics Authority (FASEA) on 1 January 2019.
“The introduction date was flagged in advance. The start date was critical to anyone considering a career in advice, as there were substantial benefits to commence as an adviser and be on the ASIC FAR pre-Jan 1, 2019,” said Wealth Data founder Colin Williams.
“When FASEA commenced, there were 27,982 advisers, and we are now down to 15,690. A massive loss. A question often asked is the effect of adviser experience. The question is an interesting one and the answer might be at first a bit surprising.
“Firstly, the loss of so many advisers means thousands of years of experience have been lost, i.e. literally walked out the door and not coming back.”
Among the 13,933 advisers to leave the industry, they held an average of 15 years experience as financial advisers each – which would equate to almost 210,000 cumulative years of experience lost.
However, the experience level of current advisers is actually slightly higher, with the 15,690 still in the industry having an average of 15.5 years of experience each.
Much of the perhaps lower than expected experience level for advisers that have exited the space can be attributed to the previously mentioned influx of advisers clamouring to enter the Financial Adviser Register (FAR) before FASEA commenced.
December 2018 saw 4,184 advisers commence – a massive outlier. Of those to join ahead of the FASEA deadline, only 1,562 remain current on the FAR. This leaves 2,622 advisers leaving with no more than four years of experience.
There is, however, beginning to be new life as new entrants to the profession begin to rise.
“Since 2018, there was a massive drop in new advisers and only recently picking up. For 2023 [year-to-date] it is at 256, but don’t forget the 334 provisional advisers who are in training to become a financial adviser,” Mr Williams said.
“So, new advisers beginning to head in the right direction.”
There was also an influx in 2016, which is when accountants were able get onto the ASIC FAR under a restricted (SMSF) AFSL.
“Of the 2,677 who were current back in 2018, only 904 are still current, [approximately] one third,” Mr Williams said.
“To put the Accountants Limited Advice experience into context, back in 2018 there were 1,107 in this category who commenced in 2016, now only 258 remain, less than a quarter.”
Adviser movement this week
The week ending 2 November saw a loss of 11 advisers, with the four new licensees and nine new entrants. There are currently 15,690 advisers in the industry.
AAN Wealth Management added three advisers, while PSK Group and a new licensee added two advisers, and Koda Capital, FMD Financial, and Findex all gained two new entrants each.
WT Financial Group, Fortnum, and Australian Advice Network were among 14 licensee owners to add one adviser each.
FSSSP Financial (Aware Super) led the losses for the week, down by five, taking its losses for the year to 20. AMP Group, Centrepoint, and Morgan Stanley all lost three advisers, while NTAA was down two.
Count Group, Diverger, Morgans, and Viridian Group were among the 23 licensee owners that were down one adviser each.
