Following the release of its Landscape Report, technology and ratings business – Adviser Ratings – has predicted that a further 2,387 advisers will depart in the industry in 2022.
Only 1,200 risk specialist advisers currently remain.
It comes after it was revealed late last year that the number of Australian advisers shrank below 19,000 in 2021 and is predicted to reach 13,000 by the end of 2023.
In the report, which looked at how financial advice has been impacted by the changing nature of wealth management through a number of projects including over 40,000 surveys of advisers and consumers, also found that 234 licenses were discontinued in 2021; the largest number since tracking began in 2015.
100,000 consumers either ceased receiving advice or were orphaned by their adviser as affordability concerns continue to grow, while 5.6 million Australians are still seeking professional advice.
Of that number, 5 per cent of consumers indicated they access advice through social media.
The report noted that the median cost for advice increased another 8 per cent to $3,256.
Advisers indicated in the surveys that they intend to use investment platforms more in 2022 to “service clients more effectively and efficiently”, while over 50 per cent said they also aim to increase ESG exposure this year.
Adviser Ratings CEO Angus Woods said the findings reflect an advice industry that has been “in a state of flux for a number of years” and that change continues.
“The advice and wealth management industries continue to evolve, and the impacts across the board, from product providers through to consumers, is significant,” Mr Woods said.
“Our research asks many questions on how Australians will receive advice in the future, and who will advise them.
“There is more change to come.”
Calling yourself a “risk adviser” is like a car salesman calling himself a “transport consultant”. Risk is a sale for commission arrangement and should not be considered financial advice. The sooner we remove risk commissions the better for all.
I don’t advise to receive a commission, I advise to help the client meet a need! How I’m paid is irrelevant
Risk advisers at end of 2026 will number 10% of current, so, lucky to be 100-120 remaining ACROSS Australia. How could it be otherwise? Commissions don’t even cover costs at 60/20 – just abjectly ridiculous. No thinking person/adviser would stay while going backwards in remuneration, surely. I worry for the life companies AND more so for the clients as life companies ONLY exist due to advisers bringing in new business. I’m convinced life coy execs have forgotten this over the past decade or so, the way they have abandoned support of advisers in the face of slashed commissions and increasing clawback period. Just untenable – no other word. What can’t go on, won’t go on, as we’ve always been told. I do indeed hope those statutory funds are robust, life coys are going to need them like never before! Earthquakes and fireworks, this way come.
TIME TO ALLOW ACCOUNTANTS IN PUBLIC PRACTICE TO GIVE INVESTMENT ADVICE , AS WE USED TO .LIKE THE GP WE WOULD BE ABLE TO REFER TO SPECIALISTS.
I worked in an Accounting firm once. When I looked out the window I’d see a Soup Kitchen with a line up around the street and I would wonder why so many people. Then I’d hear the Accountant trying to cram in a life time of financial planning advice and some hot tips in a 15 minute tax return meeting. Perhaps give it a miss and stick to doing tax returns.
Accountants always looking backward…..financial advisers always looking forward.
Wow! You mean like the good old days when you could flog those “tax schemes” for tea trees and “Bud Plan” etc and get the big 2% commissions???
That should never happen again!
My recollection was that it was 10%, not 2%! So glad I never ‘bought into’ these ‘tax’ schemes.
It was way more than 2%, but think of the tax saving you could have made
Not to mention the set-off against future Capital Gains…from other investments.
My lord – how is that the same thing. Definitely wouldn’t go to someone who thinks accountants giving investment advice is like a GP referring to a specialist.
Where are we all going?
Legit question, fed up with the industry and looking to leave…but to what?
Anywhere here have any suggestions what a post-FP career would look like?
Compliance…it’s a booming industry
Retirement, then do as YOU choose. Isn’t it about time?
Depends on your age entirely, which you don’t mention. If you’re over 55 or so then retirement may be attractive – sell up and flick the nonsense and agro. Otherwise, if younger, try mortgage broking. Good money and largely unfettered by pollies, regulators and special interest groups . . . for now anyway. Good luck!
Perhaps the FPA and AIA will be driven to action. They need to actively call out government stupidity rather than try to be buddies with them.
why they’re getting plenty of members via TelstraSuper and AwareSuper. Soon we’ll all be working with them in a call centre in Wollongong, selling salary sacrifice options and explaining the difference between balanced and growth.
I predicted the figure would land at 14,000 post RC. This was based on the U.K adviser per capita ratio applied here. The pundits were holding up the U.K RDR as the way our industry should go. The reduction in adviser numbers was entirely predictable and therefore so was the reduction in access to qualified advice.
Now watch the scam victim numbers rise.
For as long as we have idealists making up the rules we will continue to have negative consequences that whilst predictable come as a surprise to the rulemakers.
Yep, very insightful. There is a big difference between “unintended consequences” and “unexpected consequences”. It comes down to the competence of the rule makers.
Idealists are OK; it’s the Utopians whom are detached from reality.
for a sole business owner life is tough and it appears we may be well down the slippery slide of extinction. We keep trying but it is like being swept out in a rip, the harder you swim the more energy you consume until you go under.
Swim sideways to the rip!!
Swim sideways not against the rip
And we’re still yet to find out what other ‘reforms’ are coming after the election
Industry decimation under our own eyes?
A vindictive malicious indictment by all involved who forced change.
We have all fallen for the foolery of university requirements to ‘sell insurance and super’
Very few of you are true financial advisers you are sales people in a world when consumers barely can afford your sales pitch
No one was fooled. They were mislead. You are correct in that a lot of Planners think what makes them a professional is charging $8,000 that when you strip away the regulatory red tape would take about an hour. A professional would question that ratio.
“In a state of flux”. Interesting words. I would have said that it’s completely broken.
Only 1200 specialist risk advisers remain…..and this number will further decrease.
Well, I wonder whether the Life Insurance companies who left the loyal and professional risk advisers out to dry along with the FSC during the LIF debacle think that if they had stood up, spoken up, had the courage to say no, they would still have a viable cohort of advisers delivering quality insurance advice and supporting their product.
There used to be respectful relationship between advisers and insurance companies and the environment was generally positive and beneficial to the product provider, the adviser and the client.
Now it is nothing lot more than a completely broken and destroyed system where there is no longer any level of respect from advisers.
The misguided ideological manipulation of a system that would have continued to operate successfully with only a few minor changes has effectively been completely dismantled and broken.
There is no coming back from this.
The era of the Life Insurance industry is finished after a 100 years.
should be ZERO specialist risk advisers in my opinion, cant do risk without the rest
Yes and no. Can’t do insurance without good [i]knowledge[/i] of the rest. Which is why insurance advisers need to complete the full FASEA requirements. But once qualified there is no harm in specialising, just as medical specialists do after completing the same base level of medical training as all other doctors.
There is a great opportunity emerging for specialist insurance advisers that have completed the same base level of training as other financial advisers. Many holistic advisers will happily refer to them with confidence. But there is no place for those who want to cling on as undereducated sales reps.
This is a completely true representation of how I see our once-great industry of life insurance after hel;ping clients for 41 years. It is over, life companies are now only ‘selling’ commodity products. There is zero respect for advisers and what they think or want. Not saying this lightly – it wasn’t always the case. Life industry was fun even as recently as 5, 6 or 7 years ago. What ever this industry is now, it isn’t fun for anyone – old OR new to it. Sadly it will even devolve more, if you can believe it, until it does not exist around 2026. Then the life companies will see they should have crafted their ‘wishes’ a lot more carefully as they will then have what they wished for – advisers gone and Robo their only hope. Think I know how that will go. God help the clients and the statutory funds!
There is no reason to stay.
Your clients?
If you can afford to service them at a reasonable price perhaps.
So far so good,
They’ll live without me. My sanity is a more important item than them.