Adviser numbers are currently tipped to drop to 13,000 by the end of 2023.
ClearView managing director Simon Swanson has boldly predicted that the number of advisers will increase significantly over the next 10 to 15 years.
Appearing on the latest episode of the ifa Show podcast, the financial services company head said he has high hopes for the industry based on a demand and supply thought process.
Mr Swanson addressed the declining number of advisers when asked about his expectations for December’s Quality of Advice Review (QAR).
“I've always been a demand-and-supply person, right? And the issues in the life insurance industry, to be frank, are a classic case. There is demand for life insurance,” Mr Swanson said.
“Our survey done two years ago said that actually the increasing demand for life insurance in Australia, there's been a supply problem. And the supply problem has been a manufacturing problem and an advice problem.
“Clearly, if you have good demand for a product, eventually, that supply will actually be resolved and that's going to be resolved by having more financial planners. So while we've gone down from, let's say 22,000 financial planners, and we may go down to 12,000, I think it's actually going to go back to about 25,000 planners in the next 10 to 15 years, on a straight demand-supply issue.”
Mr Swanson’s comments come after a report by Adviser Ratings released in April predicted that a further 2,387 advisers will exit the industry this year.
Only 1,200 risk specialist advisers currently remain.
Earlier, it was revealed that the number of Australian advisers shrank below 19,000 in 2021 and is predicted to reach 13,000 by the end of 2023.
ClearView’s own survey conducted earlier this year to support its ensuing (QAR) submission to Treasury found that the Life Insurance Framework (LIF) had “no material impact” on advice quality and actually hindered advisers’ ability to serve clients.
Just 5 per cent, said the LIF, introduced in 2018, did have a material impact on advice quality.
Appearing on a new episode of the ifa Show podcast, Mr Swanson said that view by the survey respondents was “a fair call”.
“My view is that's quite understandable too, because I don't actually think the LIF framework actually does have much impact on the quality of advice per se,” he said.
Listen to the full podcast with Mr Swanson here.
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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