In an email to subscribers reflecting on ASIC data, Bell potter analyst Lafitani Sotiriou said, cumulatively, the four major banks, IOOF and AMP have lost 92 advisers, with each individual business in a net-loss.
“It was the worst percentage loss over the period, which is consistent with our thesis that the adviser losses are worsening,” Mr Sotiriou said.
ANZ and IOOF “clocked the worst monthly losses” since the company began tracking adviser loss numbers, Mr Sotiriou said, with IOOF losing 16 and ANZ Wealth losing 17.
Source: Bell Potter Securities Limited
“ANZ Wealth has now lost 43 advisers since the IFL acquisition was announced – equivalent to -6 per cent – with still approximately 10 months still to go before IOOF even gets the asset,” Mr Sotiriou said.
“We reiterate there is significant risk to this transaction and to be very cautious on IOOF.”
Westpac also had “a terrible month”, Mr Sotiriou said, recording its second-worst adviser losses in more than 12 months and bringing the bank’s adviser numbers to less than 1,000 “for the first time in many years”.
The company said it “continues to see significant risk for the likes of IOOF and AMP”, but added that “this move to independence should continue to support the independent platform space”.
Mr Sotiriou expressed similar concerns over ANZ Wealth’s loss of advisers in December 2017, warning that if the dealer group continues to lose advisers at its current pace, IOOF will receive 130 fewer advisers when it finally gains control of the business.
Big losses considering the trend is to throw departing advisers under the bus to ASIC as a warning to other advisers. Plus it creates the impression that Banks etc are pro-active. I think ethically, morally and career wise these guys have coped a hammering over the years and surely they’d be scarred. For a while I thought you’d have to have rocks in your head to employ anyone from CBA as an example.
If we have a planner who wishes to stay in the industry, the movement from institutional to non institutional, in my view would represent career development. A movement from a non institutional licensee to self licensing would also represent career development. The old model provided by the institutions is not congruent with the professionalism the industry craves.
Yes, more and more opinions from the writers at IFA it seems, without any real information to back this up?!
What has happened to the integrity of journalism? Or is there none anymore?
In fairness to IFA (who have regurgitated a lot of nonsensical press releases in recent times) the numbers come from Bell Potter’s analysis of ASIC data. AFSL holders have to update ASIC when ARs are added or removed from their licence, and presumably this flows through to ASIC’s Financial Advisers Register which is publicly accessible.
It would be interesting to know if any analysis has been done on changes to aggregate AR numbers at non aligned AFSLs. Are we seeing a migration from institutional to non aligned? Or are we seeing an across the board adviser exodus?
The data, and reports from Bell Potter (which I receive), are far more detailed than what’s captured in this article. The trend has been towards independent adviser groups, away from the large institutional players. There are over 25,000 advisers captured in the ASIC data, which includes traditional financial planners, private bankers, stock brokers and qualified SMSF advisers. The data exists so any client can look up their adviser to see if they are qualified. It is the most reliable source.
The total number of advisers in the sector has actually gone up in the last year from 25,259 to 25,465, yet the major aligned players (AMP, IFL, Four Major Banks) has each lost around 10% of its numbers, meaning the independent space is gaining ground.
Advisers are leaving the large integrated players for many reasons, including changing adviser standards, retirement, better technology solutions elsewhere, and because some seek greater independence and more freedom around APLs.
Yep, that’s a good analysis. Possibly add to that there are quite a few Advisers coming on to the FAR at the moment to get the benefit of 5+ years to 2024 meet the new education standards – which is a smart move. The number of new Advisers starting after 1/1/19 (who must already hold the new qualifications before they can even be appointed) will fall.
is it ground hog day….a beat up of meaningless data and frankly poor analysis …adviser exits take ages, so “losses” would have been well known, planned and expected by the powers that be in each organisation …and any purchase agreement would have clause after clause after clause about adjustments ….
Banks are finally pruning the risks…
Being within a bank at present, the ‘risks’ are staying put, it is the ‘quality’ that is leaving, in droves…
They are seeking greater ability to actual spend time planning in more efficient and agile businesses instead of being stuck within a framework designed to lift/cater for/protect against the weakest links which holds the brightest back.
I couldn’t agree more. I left bank planning a while ago and the ‘risks’ definitely stayed put because generous incentive schemes keep their bread buttered, and they’re left alone by a management who would prefer to micromanage anyone who questions the corporate line (and APL). When you’re a ‘big writer’ at a bank, the compliance scrutiny doesn’t apply to you – a blind eye will be turned to how you’re writing those big dollars until they need a scalp for ASIC.
So where are they going?
Joining IFA’s?
Going self-employed and taking their books?
Leaving industry?
Getting fired for compliance?
If not, then why are they going?
These stats mean little without any depth, but the trend is certainly there and escalating.
self-licensed! Haven’t you been reading this website over the last 2 years?? tsk tsk
Links to confirm your comment regarding self-licensing would be appreciated. The trend I see from the industry commentary is that advisers are leaving due to the forthcoming educational requirements.
I’ve got our national planner conference coming up next month, so I’ll certainly be asking the question about adviser numbers to the CEO.
Ah well, it’s as the Arabic proverb goes, “Believe half of what you see and nothing of what you hear”.
Anywhere but the banks I’d imagine! Not sure what sort of ‘planner’ would want to still be working there…
Plenty of good planners still within banks, but fewer and further between now as they inevitably find better operations in which to deliver value to clients without quite so much red tape