The growth in smaller Australian Financial Services (AFS) licensees has also seen a number of these “micro AFSLs” shut down.
According to Wealth Data founder Colin Williams, the advice industry has seen “one AFSL close for every two that commence”.
“For example, in the current financial year to date, we have seen 101 commence and 54 cease. This does raise the question as to what happens to advisers who once belonged to an AFSL that closed.”
The Wealth Data analysis, which covered the 46 AFSLs that had started the financial year with five or fewer advisers but had since closed, found that the shut downs had affected 75 advisers.
While the folding AFSLs hit 75 advisers, 38 of these are still current on the ASIC Financial Advisers Register (FAR).
The majority of those impacted fall within what Wealth Data categorises as the financial planning business model, which excludes categories such as accounting financial planning, limited advice and investment advice.
Within the financial planning model, 29 AFSLs shut down and impacted 53 advisers, of which 24 are still on the FAR.
Only 12 advisers are now authorised under licensee owners who have 20 or more advisers (11 in the financial planning model and one in the investment advice model).
Ten have remained in AFSLs where the licensee owner has between one and five advisers. The balance of 16 are in AFSLs of greater than five and less than 20.
“The data indicates that most advisers, who have been in a small licensee, tend to stay in a small licensee,” Williams said.
In November, Williams explained that a large number of new licensees starting up fall into the “micro AFSL” category.
“I can’t say for sure, but I think we coined the term ‘micro AFSL’. It was a simple way to describe the typical new licensee (AFSL) that we see each week being created, with another six this week alone,” he said.
“The ‘micro’ represents the fact that they are very small in terms of the number of advisers attached to the licensee. In our opinion, this helps to differentiate from ‘self-licensed’, which is also often used.
“The term should not be considered as representing a different AFSL to any other AFSL, i.e. may have special privileges or is restricted in any way whatsoever.”
Among the 103 new licensees that had commenced at that point in 2023 that still have advisers current, Wealth Data said just four have more than 10 advisers and 95 have five or fewer advisers.
So remove these and remove wholesale who don’t help retail majority Australians, how many actual advisers do we have? Then remove industry fund vertically integrated employees, we really have been killed as a profession. Death by Government stupidity thievery and over regulation with choking red tape worked a treat.