Advisers on steady ground as they prepare for the future

An early look at Adviser Ratings’ yet-to-be-released 2025 Advice Landscape report suggests that the advice profession has hit a plateau in terms of numbers – hovering around 15,600 – after losing almost half in the period following the 2019 royal commission.

Speaking on a webinar, Adviser Ratings founder Angus Woods said this is both a positive and a negative for the profession in that they have at least stemmed the bleeding but unfortunately, the recovery continues to be extremely slow.

“We would love to have seen a bit more of an uptick here, obviously … but this is an opportunity for super funds in terms of the new legislation that is potentially going to be enacted by the new MP Daniel Mulino,” Woods said.

Touching on something of a sore spot for the advice profession, Woods suggested that this, coupled with the introduction of a new class of adviser (NCA) proposed by the government, is an opportunity for both advisers and super funds.

“I think it’s a positive for the industry. When I talk about that, I’m talking about advice and super. I think a pragmatic approach will be had to the current legislation based on comments that have been made previously,” he said.

“But as with anything in politics, I will reserve judgement until I see more and until we see more as [an] industry. But yeah, fingers crossed, there’s some sort of continuity between the two Labor federal ministers in terms of what gets enacted and we can move forward a little bit more quickly.”

However, NCAs have become a hot topic among professional advisers, with some raising concerns about the possible harm that could come with undereducated persons providing financial advice, while the bar has actually been raised for the profession in recent years.

Looking at the client capacity issue among the profession, the report found that advisers are currently serving around 1.8 million Australians.

However, the challenge is that an estimated 2.5 million more people are expected to retire in the next decade, which advisers will simply not be able to cater to if progress continues at its current rate.

While acknowledging that not all 2.5 million people will need comprehensive advice, Woods argued that many still will, particularly with the coming changes to Australia’s already complex superannuation system, meaning something needs to be done now to prepare for this inflow.

On a more positive note, the report found that the number of advisers intending to leave the profession has continued to decline, with only 10 per cent falling into this bucket, down from 15 per cent from 2024 and a significant drop from the 26 per cent seen in 2021.

Woods noted that the profession itself appears to have reached a state of relative stability, which provides a level of surety for not only advisers and clients but also to the Australian public more generally.

“It’s nice to sort of hear some positive outcomes coming through within the industry, and what I meant by that is in terms of, you know, profit margins, in terms of appetite from M&A, overseas players and internal players and licensees themselves looking to invest in this space,” he said.

“So, not only from an investment point of view, but it also starts to give certainty to government and to the Australian public that we do have a foundational support there for, I would say, complex advice.

“But that notwithstanding that, obviously the middle class there, the middle rump of Australians, are still missing out, and that’s where this whole superannuation space becomes a little bit more interesting and a little bit more exciting in terms of how the super funds play it.”