The current number of advisers sits at 18,574, following a record week during which as many as 124 professionals left the industry, data issued by Wealth Data on Thursday (2 December) revealed.
The weekly losses do, however, include those that have occurred as a result of Commonwealth Bank’s wind-down of Commonwealth Financial Planning (CFP), impacting 74 advisers over the past week.
But the total net loss for the week was also compounded by heavy losses at AMP (-38) and IOOF (-28) with very little take-up elsewhere. Wealth Data noted that AMP had losses across the board and none at this stage have switched to alternate licensees, while IOOF losses were compounded by several staff coming off the ASIC FAR.
According to the data, 2,062 advisers have left the industry since the start of the year, while only 144 new entrants were recorded.
It’s worth noting that the only area boasting growth was the self-licensed sector where, year-to-date, 13 licensees have opened and 45 have closed. By comparison, across the accounting – limited advice group, zero licensees have commenced and 105 have closed.
The data also revealed the existence of 51 licence owners with more than 50 advisers, of which 13 are in positive territory for combined growth of 95 and 38 are in the red for a combined total of 1,970.
SMSF Adviser Network remains the largest individual licensee at 638, AMP Financial Planning at 612 and Morgans at 474.
What I’m concerned about, is that with the new breach reporting laws (1 October), many advisers will be pinged under the new breach reporting legislation, as:
(i) All financial institutions they deal with are obliged to report a breach (i.e.the equivalent of dealing with compliance from multiple licensees, not just one).
(ii) the bar on what constitutes a breach is lowered significantly, and will be determined by the institution’s internal compliance officers.
(iii) Practically, while the external licensee must be notified, the chance to contest seems highly limited, as the institution must establish the facts and report to ASIC within 30 days (or serious penalties apply). The clock cannot be extended.
I may have this wrong. If that is the case, I’d like for IFA or informed readers to explain how I have it wrong.
The number of advisors sitting on the sidelines, currently unregistered, but still sitting the FASEA exam demonstrates that the government still has a little bit of time left to partially turn this around.
I am surprised by the lack of impetus to come up with novel solutions, or at least discuss them. Tinkering around the edges of limited advice isn’t exactly going to do much.
There hasn’t even been a survey that I’m aware of to determine which bit of regulation has been the tipping point for advisors to leave. (Questions tend to be generalised and broad, – compliance or education). For example more detail could be :- annual opt in, ceasing of grandfathered commissions, Fasea exam etc.
I also haven’t seen any survey asking what advisors actually require their licence for. (Eg if they were pure life insurance, stock broking, accountants etc. A different tier of licencing with less compliance may be at least worth discussing).
What do you expect when the requirements of continuing to be a “Practitioner” become more similar to Order Taking Accountants and Ambulance Chasing Lawyers – Fee based, Hourly Rates, Ideal Client, Political Career Agendas
Make advice more affordable to Australians they said….
Yep, they keep saying it, but they add more and more red tape. ASIC’s latest guidance will add more time and cost to an SOA once licensees digest it, we have tmd reporting, ridiculously complex new fee consent documents…. and that’s just the last 6 months