The cost of advice is expected to grow as the number of financial advisers in Australia continues to drop, according to a new report.
Following the release of its Landscape Report, technology and ratings business – Adviser Ratings – has predicted that a further 2,387 advisers will depart in the industry in 2022.
Only 1,200 risk specialist advisers currently remain.
It comes after it was revealed late last year that the number of Australian advisers shrank below 19,000 in 2021 and is predicted to reach 13,000 by the end of 2023.
In the report, which looked at how financial advice has been impacted by the changing nature of wealth management through a number of projects including over 40,000 surveys of advisers and consumers, also found that 234 licenses were discontinued in 2021; the largest number since tracking began in 2015.
100,000 consumers either ceased receiving advice or were orphaned by their adviser as affordability concerns continue to grow, while 5.6 million Australians are still seeking professional advice.
Of that number, 5 per cent of consumers indicated they access advice through social media.
The report noted that the median cost for advice increased another 8 per cent to $3,256.
Advisers indicated in the surveys that they intend to use investment platforms more in 2022 to “service clients more effectively and efficiently”, while over 50 per cent said they also aim to increase ESG exposure this year.
Adviser Ratings CEO Angus Woods said the findings reflect an advice industry that has been “in a state of flux for a number of years” and that change continues.
“The advice and wealth management industries continue to evolve, and the impacts across the board, from product providers through to consumers, is significant,” Mr Woods said.
“Our research asks many questions on how Australians will receive advice in the future, and who will advise them.
“There is more change to come.”
Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.
Neil is also the host of the ifa show podcast.
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