The Adviser Ratings Musical Chairs report found that 1,750 advisers left the industry in the June quarter, leaving just 25,470 advisers across Australia.
This equates to a 6.4 per cent decline in total adviser numbers for the quarter and is in line with the continuing fragmentation of the industry.
In December 2018, there was a large spike of new advisers due to new and returning adviser registrations prior to FASEA obligations coming into effect.
However, the first six months of the year have seen 2,825 advisers cease operation, while there have been only 19 new entrants.
“We would expect this trend to continue, particularly in the short term prior to larger numbers of new entrants, but also in the medium term,” said the report.
“We anticipate a higher than average number of ceased advisers over the next few years as more and more advisers ‘bite the bullet’ and call time on their advising careers leading up to 2024.”
This was due to 2024 being the deadline date for all licensed advisers needing to have achieved a bachelor’s degree or equivalent due to the FASEA regulations.
Independent advisers were up slightly to 55.4 per cent of total advisers while aligned advisers are down 0.5 per cent to represent 44.6 per cent.
This was due to 69 per cent of shifting advisers moving into privately held licensees while only 15.5 per cent were shifting to aligned and even less into institutions.
The largest cohort of independent advisers (26.7 per cent) were part of licensees with 30 or more advisers, while 19.4 per cent belonged to licensees with 10 or less members.
For the first time ever discontinued licensees had overtaken new entities, which the report said was a result of the FASEA regulatory regime.
“We expect new adviser authorisations to slowly increase in the next 12 months as more advisers start sitting the newly set FASEA exam, along with more new advisers fulfilling the professional year obligation,” said the report.
Yet the mental health issues that are rapidly developing amongst an alarmingly high number of advisers of all standings still does not seem to be communicated to MP’s or the public. This is not about shunning education or professionalising, its about a real issue that is the bi product of rapid ideological reform and a standards body (FASEA) that has failed to manage conflicts and deliver workable solutions with the required timeframes. Time to speak up before its too late and more advisers take their lives (i know of 2 already).
Loss of human life is Unacceptable no matter where you stand on these reforms.
There I was enjoying my day and then read this article and the comments. Regulation fatigue kicking in again.
Dwayne, respect certainly has been taken away from us by many. I have 35 years in the business, prior to that a school teacher, now a CFP for decades, yet no respect has been shown (except by clients) for this!. I just resigned from FPA after being a founding member, they will not survive the FASEA tsunami. Mate like you I am moving on before the PI disaster explodes! Pivot is the word!!
So adviser ratings puts the numbers from the ASIC register into a spreadsheet, and rolls this information out as the gospel of whats happening in the industry and why. Well no adviser ratings, you don’t deserve a voice in this industry, as you are just hangers on living off our names. That ratings site is a shamozzle, those that allow themselves to be rated on there are just looking for trouble. If you cant find new clients in your area without relying on this rating crap god help you. .
Well it seems like the time has come. After 30+ years I am disgraced and embarrassed of what is happening to a great industry. It will takes years to recover
[quote=Anonymous]There is likely to be around 5000 left by 2024 which was what the realists are predicting. So goodnight FP business, and also goodnight to the AFA and FPA who failed them.[/quote][quote=Anonymous]There is likely to be around 5000 left by 2024 which was what the realists are predicting. So goodnight FP business, and also goodnight to the AFA and FPA who failed them.[/quote]
that’s right there won’t be more than 5,000 left. those 5,000 will already have two more degrees than the minimum fasea requirement, at least 20 years experience and are multi millionaires and saw this coming 15 years ago. they will be the only ones who will be able to withstand the reforms because they got ready 15 years ago.
25,000 is way too may even 10,000 is too many most just won’t survive and will be life and money coaches instead, which is fine
The betrayal of Financial Planners the various adviser associations is almost complete. AIOFP is the only group actively lobbying for the industry
All new intern advisers have to be mentored and Monitored by an experienced adviser. FPA, FASEA, ASIC and other government body kidding them self, we advisers will take this risk. As a senior adviser I won’t. Rich will get richer, and good luck Australia.
I got out 4 years ago, I could see the writing on the wall so nice timing and retirement is wonderful.
Stats without context are misleading. The average adviser age is 59. Many of those exited/ exiting are geniune retirements. I take the point that FASEA may have accelerated plans for exit by maybe a year or two for a lot of those guys. Also comms bans etc.
The concern is that only 19 new enterants registered.
Soon the hang-wringing legislators will realise there is a big problem.
Australians won’t be able to afford advice and a black market of ‘advisers’ will emerge to help them. [b]This is what over half of public practice accountants are doing ! No AFLS so that they can keep costs and ted tape down. [/b][b][/b]
In a few years the ideological legislators will realise they must collaborate with real practitioners to design a ‘good enough’ framework that adds value for both adviser and customer and product providers. And no it won’t be perfect.
I will rejoin when they figure that out in 2025
No amount of regulation can defy the maxim “a fool and his money are soon parted”
Can an industry sue its regulator and legislators – for gross incompetence and failure of its best interest duties?
And enforce much higher education and conduct standards for its policy makers – to understand what they are doing.
How do we do it?
Interestingly the industry funds are panicking about other policies that soon force THEM to do more to help members set up retirement strategies when they get there including:
– treasury’s retirement income covenant proposal (part of this is CIPRS)
– APRA’s member outcomes package
– AGA’s new risk metric for all retirement products
– Design and distribution obligations (DDO) for all financial products (they must specify what category of customers each product is for and make sure the ‘distribution’ ensures only those customers get given the product
Most super funds haven’t a clue how to achieve this. And simply don’t know where to start.
They want to distance themselves from the responsibility of guiding members to make the right decisions.
Hmm.. isn’t that what advisers used to do?
OMG. The frustration these morons who caused this in our industry is beyond belief.
How on earth the government let these thugs (FPA and the like) manipulate a tiny portion of bad egg stories and throw all of this mud at every adviser and firm in the country is disgraceful. Utterly disgraceful.
I like thousands of others have left already. No longer willing to play this education and compliance CIRCUS, and it is a circus.
I don’t know what is worse, the FPA type clowns who caused this or the advisers who allowed it to happen and continue to allow it to occur by being FPA members who are all living in glass houses by the way.
I continue to advise friends, family and a few dozen loyal clients. No one is interested in SOA’s, compliance ridden nonsense and just want to receive good, unbiased guidance without this circus act you poor poor buggers whom remain in this ridiculous industry must do.
Advice is no longer affordable for most and those that can afford it CAN NOT justify it. Before one of you remaining FPA drones who think your worth it chimes in, leave your name and number and I’ll come out and expose you and your business for the rort it is.
Go ahead, make my day. I know exactly what should be charged and what advice should be given.
In the middle of difficulty lies opportunity, about time the industry moved to a model where becoming a financial adviser can’t be done with a diploma from a Cornflakes box.
Just handed my AR to the dealer group today. Fed up, lost my MOJO
There is likely to be around 5000 left by 2024 which was what the realists are predicting. So goodnight FP business, and also goodnight to the AFA and FPA who failed them.
I am 35, have 14 years experience (one of those rare FP graduates from day 1), have bare minimum FASEA requirements, on to my 4th degree (plus many extras) and I am actively looking to leave the profession in the next 6 months. I am young (and qualified) enough to have options to do other things (where I will receive a lot more respect for what I will do). Financial Advice is simply not worth the regulatory hassle and personal risk.
The current model of financial planning will cease to exist in about 2 years. This is by design, this is an intended ASIC outcome. Something else with pop up in its place. That ‘something else’ will be subject to even more regulation, will receive even more scrutiny from all corners, charging clients will be even more difficult and the person risk to the individual adviser will be even greater. If you wouldn’t invest in such a risky enterprise, why would you want to work in it?
I feel sorry for those who are trapped without alternative options. Everyone should start thinking about how they can/will pivot into something else. The people who are leaving are not all nearing retirement, are not all wanting to avoid increased minimum requirements, some (like me) are simply fed up.
we need terry m back. he had all the answers, short soa’s (1 page only) with hyperlinks to everything (i know they didn’t work) but he reckons asic “faked evidence to get him”
terry come back
So that is 1750 x $2,500 per course x 8 subjects =$35,000,000……not forgetting the $600 x 1750 exam fees of $1,050,000 that walked out the industry.
No kidding Einstein.. always going to happen. I will be gone and personally know another 10 planners also closing shop by the end of the year. This looks and feels like the automotive industry shutdown.. the only difference is that we do not have unions in the press telling the world about the job losses. It makes me sad that after 32 years in this industry is that where we are at.. the industry being run by people with no understanding of the industry trying to achieve an ideological dream! Just have a look at the Opt In insurance debacle by the highly educated people at the Productivity Commission…. say no more!!!!!
Only a matter of time before a class action due to mental health should be established.
Spare a thought for those universities and their aligned, conflicted professors whose expectations of MEGA – $$$ are being eroded daily…what a backfire!
It’s the absolute stubbornness of the clowns running this industry into the ground that infuriates me more than anything.
How much more carnage does there have to be before the Government or ASIC actually realise what’s happening here and what the impact to Australian consumers will be when there aren’t any more experienced advisers left to provide quality advice to what consumers should do, not what the rubbish, greedy industry superfunds will force consumers in to doing? What is it going to take for life insurance companies to finally put their hands up and put a stop to this?
I’m just staggered this is being allowed to unfold. The greed and the lack of conscience that those manipulating all these changes are showing, including FASEA you disgraceful body, is just mind blowing.
Really surprised that 19 people actually joined the industry.
This will likely only accelerate when the looming Professional Indemnity Insurance crisis starts to bite. When Llyods of London start talking about not offering PI to Australian advisers going forward it send a clear signal to all the other smaller insurers that the risk is simply too high, all because advisers are grouped with the bank from a risk classification point of view. Under law, if a AFSL licence holder has no PI, then that they cannot operate and even service existing clients. Maybe the Royal Commissioner, Kenneth Hayne should take responsibility if this problem eventuates and this has been clearly a bi-product of his recommendations that he clearly did not take into account.
The supply of new advisers will not increase for some years. Given the significant study, FASEA exam, and licence realignment preoccupying existing advisers, plus the obligations on existing advisers that go with running a PY program it is high unlikely that there are more than a handful of new advisers in training.
The expectation was that the big banks would provide PY training for new advisers – obviously no longer an option.
The 50% decline in adviser numbers is looking like a conservative estimate. The obligations for accountants to get through FASEA hurdles makes it completely unappealing for them. How many stockbrokers or life insurance specialists come close to getting enough exemptions to make it appealing for them.
So the future for the majority of the population is going to be No Advice for No Fee. Much more likely than the current Advice for No Fee model that ASIC is enforcing (as a result of media and government pressure).
Exactly as industry super have planned for over a decade now. Have to admire their strategy, patience, persistence and planning on this, especially their management of setting the dialogue and agenda all the way through the fall-out from the GFC through to the Royal Commission.
If Kell & Medcraft weren’t plants or somehow incentivised by industry super, (and let’s face it, no serious investigation into that mega-billion dollar section of the national finance industry smells of rotten fish), then the utter and complete brainwashing of ASIC via other subversive means of left-leaning lawyers being the standard employee hiring criteria, has been brilliantly successful.
Congratulations for losing the battle of the recent election, but managing to begin winning the war of unionising the nation’s wealth by vastly reducing those ideologically opposed to their milking of the multi-million dollar cashcow annually.
Also I must say, this also extends entirely to those of you who have been far too slack to do anything about it, and even more so to those delusional planners out there who believe this is all just some fanciful conspiracy theory (I mean, if you had hundreds of millions of revenue dollars to lose but tenfold that to gain, like the unions and ISA have, I am sure you certainly wouldn’t go about reducing the strength, numbers and voice of your competition would you?).
Goodnight Financial Planning Industry. Yes, the band may still be playing, the deck chairs are still upright, but the iceberg has been hit, the water is coming in the peasant levels of the ship, the hull is about to be cleaved in two by the weight of shitty advisers and the overall stupid approach to regulation by ASIC, FASEA and associated actors.
The only life raft is to advise wholesale only clients, until that loophole gets shut down.
Regulators and ppl publishing this all the time to add to stress of advisers currently hanging in there just to sell an article should be ashamed of themselves:
Earlier this week, former financial planner and founder of PFM Australia and Alliton Capital, Barry Daniels pointed to the distress being caused by the constant changes to the advice industry and warned of the mental health issues being driven by reform fatigue.
He said these factors were driving many advice practitioners to terminate their careers and exit the industry but that, more worryingly, there had been tragic mental health consequences.
When the dust is settled on the current series of conservative “governments”, history will record that two industries were consigned to oblivion, and their employees with them – the Australian motor vehicle manufacturing industry and the financial and life insurance industries. All from the Government of small business. Bah humbug!!
I guess the government and banks got exactly what they wanted then hey!
Not surprising… accountants would make up many of those leaving, I would think. However, the writing is on the wall for government…. who will be left to deliver advice after 2024? If advisers dont pass the exam (which has some disappointing feedback so far), will they re-sit or leave? It is time for the Minister to re-examine time frames and amend legislation accordingly. Professional year – maybe we need an Indenture system so that the business that did all of the expensive hard yards can recoup a fee from the new firm if that adviser leaves inside 2yrs. that would at least give some reward for taking the financial risk and putting in the time. Otherwise, why would any business entertain the idea? Unless it was family succession, of course.
” leaving just 25,470 advisers across Australia”. is that still a lot? Whats coming, yearly opt-in, no more comm left on Wealth, will mean the number falls probably by another 5-10k, unless someone comes up with a great new business model..
I’d be guessing this trend will continue for at least the next 20 quarters…
When you decrease supply, prices go down right? No! So, less advisers coupled with more regulation will make it more affordable for people to obtain quality advice? Honestly, our law makers and regulators simply have no idea.
If the last one out could give the keys to the Industry Super Funds as you leave it would be appreciated.
After a decade of relentless and manipulated attack, the self esteem and confidence of hard working and professional advisers is now starting to crumble and the flow on effect will be a massive loss of technical knowledge and client and human experience.
This is only the tip of the iceberg.
There is only so much the human spirit can take and the legislative objective to eradicate a large portion of advisers is now coming to fruition.
The industry has been rooted by public servants. I rest my case
gee thats a surprise with so many advisers leaving the industry , amazing would not have expected that, thought that there would be huge que of New advisers wanting to join the Financial services industry, NOT.
Surprise surprise when the industry is so fucked