The latest Rainmaker Information’s Financial Adviser Report has revealed almost 9,000 advisers have exited the industry since 2018, approximately a 30 per cent decline.
There were 19,382 financial advisers operating in Australia as of 30 June 2021, the first financial year since 2015 that ended with numbers falling below 20,000.
In the last year alone, the number of advice licensees fell from 2,125 to 1,907, a 10 per cent decline, with advisers that are part of a bank-owned licensee falling 39.6 per cent in the same period.
The larger AFSLs are also seeing the biggest reduction in their adviser numbers. The number of advisers representing AFSLs with one or two advisers actually increased by 0.6 per cent in the last calendar year and AFSLs with three to 10 advisers only decreased by 3.9 per cent.
“This adviser exodus has been associated with the massive disruption now befalling the financial advice sector,” said Alex Dunnin, executive director of research and compliance at Rainmaker Information.
“The regulatory disruption that Australia’s financial advice sector is facing is due in large part to the huge push by government, regulators and other stakeholders to improve the quality of financial advice.”
With several new pieces of legislation being introduced from 2017 to 2020, this corresponded with the industry shifting from a gradual incline in the number of financial advisers into a rapid decline. This includes the incoming DDO regulations soon to be implemented in October.
“We are yet to see the evidence, however, of how all these regulatory changes have improved the outcomes for those who seek financial advice,” Mr Dunnin noted.
Recent statistics from Wealth Data last week also revealed that the three largest advice groups – AMP, IOOF and NTAA – accounted for 52 per cent of adviser net losses since the start of this year.
Namely, the total number of advisers since the start of 2021 shrunk by 1,649, while outflows from the three groups totalled 861.