Adviser Ratings’ Financial Advice Landscape Report has suggested that 10 per cent of advisers intend to leave, while another 12 per cent are uncertain about their future.
Given that the advice industry had shrunk to 15,800 advisers by the end of 2022, Adviser Ratings predicted that, based on its findings, 1,500 advisers intended to leave, while another 2,000 are undecided about their future.
Since 2019, the advice industry has shrunk from 27,959 advisers to 15,819.
Although the sharp decrease in adviser numbers seems to have levelled off in the current year, following the deadline for existing advisers to pass the financial adviser exam in September, several unresolved concerns continue to worry advisers.
“While it’s unlikely that every adviser who is unsure will depart, our analysis indicates the future of education standards will dictate the path for some advisers,” Adviser Ratings said.
Namely, while advisers currently have until 2026 to meet the approved degree or bridging requirements, they are eagerly awaiting Financial Services Minister Stephen Jones’ decision on the government’s commitment to removing tertiary education requirements for those who pass the exam, have 10 years of experience, and a clean practice record.
Dubbed the experience pathway, the proposal would equate the worth of a degree with 10-plus years of experience in the industry.
“We’re told the wait for certainty about what will happen with education requirements — specifically, experience recognition — is creating anxiety among advisers,” said Adviser Ratings.
“Mr Jones has remained committed to keeping the adviser exam but said Treasury would look at whether improvements could be made, such as reducing the number of questions. The consultation process also looked at how to attract new advisers to the profession at a time when numbers are quickly falling.”
In December last year, Mr Jones said that the government would begin consulting on this topic early this year and would have provisions ready for legislation in the first half.
“It would be my hope that we’ve got legislation in the first half of next year through to parliament so those things can be settled,” the minister said at the time.
However, an update has yet to be provided regarding the government’s plans.
Can’t believe we are still talking about this.
There’s been enough time, just get the study done or get out of the way of making us a profession
How long ago were the new requirements first tabled?
Any adviser could have done the required subjects working at a snails pace by now.
Simply no excuse for those who didn’t bother.
I truly hope they walk away from this plan to grandfather some advisers and we see them leave the industry.
To me, it simply demonstrates an unwillingness to learn, adapt, prioritise clients or the profession itself – in a profession which requires all of its advisers to do all of these things constantly.
Why would we hope that those who shirk these responsibilities are given a free pass to stay in the ‘old ways’ when our profession is in such dire need of evolving.
The total number of ‘financial advisers’ existing by 2026 is anyone’s guess – probably less than 10,000 says the smart money. The politicians and special interest groups that hold sway over our industry ‘associations’ will always be outv there doing what they can to make life harder for clients and advisers. One thing that isn’t in question is the number of specialist risk advisers, rarely spoken about on these pages. That number will be so close to zero it won’t matter.
While the Minister and his minions take time to make a decision, does that mean that the deadline will be stretched out by the quantum of time he is taking….?
Selfishly, I am against changing the goal-posts. I’ve just obtained Masters and feel those who advisers who cannot be bothered studying should be shown the door. No surprise that mortgage broking numbers are at record highs (29,000+) – no degree required, massive commissions + unlimited cowboys/girls. Now, don’t let the door hit you…
We’re approaching the 12 month anniversary of the promises and the election. THE key plank for the Financial Services sector is the 10 Year Experience Pathway. There has been no further comfort provided by the Minister this past 11 months.
During Labor’s last term 2007 – 2013, they inflicted uncertainty around the economy like excrement from a chimp. Messy indecision and uncertainty are deep in the DNA of Australian political bureaucrats. Another 12 month wait is fatal for many careers and client care.