Just 16,000 advisers are expected to remain in the industry by the end of 2021 as the financial planning sector deals with the fallout of the FASEA regime and other regulatory changes, according to new data.
Speaking in a recent presentation, Adviser Ratings chief executive Angus Woods said the group had revised down its previous predictions around the number of advisers that would remain in the industry once the FASEA standards came fully into force.
“The run rate continues to be quite steady, so if we play that out as it is at the moment, we expect 12,000 advisers lost from the industry from its peak,” Mr Woods said.
He added that with pass rates coming down in the latest FASEA exam sessions, and advisers running out of time to take the exam with the bill to extend the compliance date currently stuck in Parliament, it was likely that significant numbers of advisers would exit the industry in the coming months.
“Those who are more confident tend to sit the exam first and that shows in other industries,” Mr Woods said.
“We are seeing bigger failure rates from re-sits of the exam which isn’t great, and that is going to be a cause for concern once the FASEA exam [bill] gets passed given the amount of advisers who will have to re-sit.”
Mr Woods said around 16,000 advisers still had to sit the FASEA exam, and this remaining cohort were older on average than those who had sat the exam and passed.
“There’s advisers who for 20 to 30 years haven’t sat an exam, some of them are reading about it on social media and that causes further anxiety for some advisers. So we will continue to see more advisers exit between now and 2021,” he said.
According to Adviser Ratings data, more than 60 advisers had left the industry in the month to 11 June alone, although a large number of these had been due to the licence suspension of dealer group MyPlanner.
A further 36 switched licensees during the month, with 11 joining Melbourne dealer group Avana, four advisers joining Australian Advice Network and three joining Centrepoint Alliance’s group, Alliance Wealth.
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