The latest quarterly Adviser Ratings’ Musical Chairs Report has painted a sombre picture of the profession’s ability to recoup its numbers, revealing that while a few dozen advisers entered the profession in the last three months, departures surpassed the new entrants figure by more than three times.
Namely, 264 exits were recorded in the period between October and December, suggesting that correcting the balance could be an “ongoing challenge” for the profession, even in the presence of new advice models.
Adviser Ratings put the final 2023 adviser count at 15,634 with the largest cohort, or 4,193, operating in one of the 1,518 privately owned licensees that boast one to 10 advisers.
Just 220 advisers or 1.4 per cent of the total adviser count work within five banks – compared to 5,256 back in December 2017 – while 592 advisers are employed by industry superannuation funds.
The firm also revealed that 57 per cent of the new licensees that commenced operating in the fourth quarter were single advice firms.
In the year to 31 December, privately owned licensees with one to 10 advisers boasted the largest number of advisers, or 4,193, compared with 4,052 at the end of 2022.
Privately owned licensees with 11 to 100 advisers had 3,235 advisers, compared with 3,152 at the end of 2022, while those privately-owned with an upward count of 100 advisers attracted 3,095 advisers versus 2,974 a year earlier.
According to Adviser Ratings, switching activity remained “fairly light” across the quarter, with most of the movement occurring at the individual levels, with advisers finding new homes that align with their objectives.
The major exception was the shift of more than two dozen advisers from formerly TAL-owned Affinia Financial Advisers to Count Financial, after the latter acquired Affinia.
Count is shortly expected to become an even bigger “juggernaut” this year with its acquisition of Diverger in March.
While Adviser Ratings expects to see a pick-up in adviser switches in the first quarter of 2024, it does not expect it to hit the heights of 2019 and 2021, which were driven by “frenzied corporate activity”.
