- Agree (83%)
- Not sure (10%)
- Disagree (7%)
Our latest poll draws on the most recent data released by Adviser Ratings, which predicts adviser numbers will have decreased 20% by the end of 2021. We’re asking whether you think this trend will continue next year.
According to the ratings firm, adviser numbers will have dropped to around 16,500 by the end of this year after taking into account organic retirements as well as those advisers who will not have passed the FASEA adviser exam by its 31 December cut-off and who won’t have qualified to sit the exam in 2022 (see: Adviser Numbers to Drop to 16,500…).
From the current number of just under 19,000 advisers, the firm forecasts there are still close to another 5,000 who will depart the sector before numbers stabilise.
one in five …advisers will have departed the sector in 2021
At the start of 2021, according to Wealth Data reporting, there were 20,635 active advisers on ASIC’s Financial Adviser Register, so with the Adviser Ratings prediction of only 16,500 advisers remaining at the end of 2021, this means one in five, or (net) 20% of advisers will have departed the sector in 2021.
If this trend is repeated in 2022, there will only remain a net 13,200 advisers by the end of next year, which will represent a drop of more than 50% in a few short years from the almost 28,000 active advisers registered at the beginning of 2019.
When will this decline in adviser numbers stabilise? Do you think another (net) 20% will disappear in the coming 12 months?
This is the point at which we could start to talk about a number of factors which may have a bearing on adviser numbers in 2022 and beyond, including minimum education standards required to be met by 1 January 2026, the seemingly ever-increasing regulatory burden being imposed on advisers and the accompanying challenge to maintain a financially-viable advice business, together with remuneration restrictions being placed on life insurance advice in what is otherwise a free-market economy.
There’s clearly a lot of water yet to flow under the bridge before adviser numbers consolidate, but do you think the trend that has occurred in 2021, that is, a 20% reduction in adviser numbers, will be repeated next year? Tell us what you think and we’ll report back next week…
Half of the advisers I speak to are negative about their future in financial advice, they will be doing something else within the next 2 years.
The other half are hanging on to the belief that less advisers providing advice will mean more business for the practices that are still operating.
Both halves are right. We don’t actually need that many advisers anymore.
– Baby boomer and older aged clients would represent >40% of advice revenue in 2021, in 2026 this will be <5%
- Fintech, Insurtech, Wealthtech, Advicetech are reducing the need for financial advisers
- Effort required for each dollar received is tipping the balance out of favour for advisers. Lower revenue/ renumeration expectations will change the industry to a lesser profession. Professions generally don't provide cheap services.
Way less carrots
Way more sticks
Everyone knows these things, they aren't new discoveries.
All the best
“Free Market economy”? Does he live with the tooth fairy? Perhaps Puff the magic dragon knows where he lives?
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