Recent findings by Beddoes Institute indicate that whilst the decline in adviser numbers throughout 2017/18 was mainly among non-life insurance advisers, 2019 has seen the exit rate of both life and non-life advisers reach similar levels.
These findings stem from new analysis by Beddoes* which has revealed adviser numbers are declining by approximately 15 per day in 2019.
Compounding these findings, according to Beddoes, is the fact that there are few new entrants into the industry, and just as concerning is the discovery that 64 per cent of advisers exiting possess over a decade of industry experience.
According to Dr Rebecca Sheils, Director at Beddoes Institute, the sheer rate of exits, which far surpass the number of industry entrants, has the potential to create a substantial memory gap: “This memory gap has the potential to result in a loss of expertise and revenue that may take the industry years to recover from,” warned Dr Sheils.
The Beddoes research suggested much of the adviser exodus this year can be attributed to the new ASIC requirements of an approved degree, a professional year, an exam and the requirement to adhere to a code of ethics.
“Based on the data and general rhetoric surrounding the new professional standards, it seems that advisers who’ve built their livelihoods in this industry might be slightly wary – perhaps not only of re-treading old pathways with regards to training, but also of feeling like they have to metaphorically rebuild themselves to be able to remain in the same professional space they’ve embodied for years,” says Dr Sheils.
Whilst creation of continuous learning will benefit the advice industry moving forward, Dr Sheils questions whether there is a better way forward than making well-established and experienced advisers reinvent their professional standards wheel.
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