Not surprisingly, this report on the continuing decline in adviser numbers generated the most interest from advisers this week. Perhaps there’s some light at the end of the tunnel, courtesy of the Government’s Experience Pathway proposition for 10-year advisers of good standing – but the comments made so far at the end of this article don’t exactly project a rosy future – especially for specialist risk advisers

Research firm Wealth Data is expecting that the number of advisers will reduce to approximately 17,200 during January and thereafter to between 15,000 and 16,000 as the 2022 year rolls out.

Writing in his first weekly report for the year, Wealth Data’s Colin Williams says the number of advisers decreased by 603 from 18,273 to 17,670 between December 23, 2021 and January 13, 2022.

But he adds the firm is expecting additional losses for 2021 as the reporting rolls in post the holiday period.

The report also points to the net change for the month of December 2021 – a decrease of 806 while the net change for the 2021 year is a decrease of 2,930 advisers.

Colin Williams …2021 has been a very difficult one for advice firms with very few bright spots…

Williams notes that as the data slowly comes in “…the numbers clearly show that 2021 has been a very difficult one for advice firms with very few bright spots.”

The report also highlights different sectors of the market and Williams says that overall the losses are 14.43 percent for the year.

He says the Financial Planning sector, the largest, suffered a loss of 1,652 advisers or 12.91 percent and that this sector is in some ways a story of ‘large versus small’.

“The only real growth is the number of new licensees with 131 licensees opening and 47 closing – virtually all new licensees being small licensees (less than 20 advisers). While some of the large licensee owners who operate in this sector suffered heavy losses,” he says.

Williams points to Insignia Group (IOOF) down 31.35 percent and AMP Group down 26.21 percent.

“Their losses are much greater than the total loss of 12.91 percent for the sector and their combined loss of 964 advisers, represents more than half the losses across the sector,” he says.

…the hardest hit sector in percentage terms was the Accounting – Limited Advice…

Williams says the hardest hit sector in percentage terms was the Accounting – Limited Advice (mostly advice limited to SMSF). It was down by 36.31 percent and he expects this to deteriorate further as more reporting comes in over the next couple of weeks.

This sector also saw 121 licensees close and none commenced.

Williams says that holding up the best with losses of 5.95 percent is the Accounting – Financial Planning (holistic advice, mostly owned by accounting groups).

“It is a relatively small sector of the market with less than 1,000 advisers. This sector also had growth in the number of licensees with 15 commencing and nine closing.”

The report says the Investment Advice sector (mostly focused on portfolio advice often using direct investments) held up very well through to December, but got hit hard in the last few weeks due to FASEA.

Overall it is down 297 advisers or 8.69 percent. “However, since December 1, it lost 194 or two thirds of their losses in one month.”

Courtesy of Wealthdata.



3 COMMENTS

  1. It has been one continual nightmare that seems to never go away, which Squeaky 21 rightly points out, largely came about from vested interest groups and from the rest, a total ignorance of what risk advisers actually do.

    If there is any light at the end of the tunnel, it is that the Government, the opposition and the Regulators have finally realised that they have overstepped the mark.

    The problem now is that the very people who sent us down this path of destruction, are still voicing their opinions, with little constructive advice on what to do to bring the Life Insurance Industry back from the precipice.

    Hindsight is a wonderful thing and there are thousands of intellectuals, Government officials, Public servants and my favourite, ” Legal eagles” who will be paid huge salaries and fees to dissect the carnage that they were instrumental of and the cause of this totally preventable disaster.

    There is ALWAYS an easy and affordable way to fix an issue, UNTIL you involve the Legal Industry, at which point the merry go round of complexity rears it’s ugly head and we are all forced down a rabbit warren of legalize that no-one understands.

    The Corporations Act grew from 400,000 words to 800,000 words and even the Lawyers cannot interpret what it all means in a clear and concise manner that would enable the rest of us mere mortals to come to grips with it.

    There is a growing awareness and even better, a willingness from the Government to start listening to solutions that will turn this nightmare into a new morning where we can all wake up and actually look forward to the future.

    Hang in there everyone. 2022 will be a turning point, though as is the norm, there will be some road diversions along the way, which considering what we have all been through, will be but a few more bumps.

    I for one, will continue pushing for BIG changes and that is my purpose in life, so all current and past Advisers will be given the opportunities to once again contribute and rebuild what can be a great Industry that provides the security and peace of mind all Australians need.

  2. Well, I left in November after 36 years due to stress/depression caused by this madness – 1 less, so there’s that . . . 🙂

    I will say that I predict, come 2024, there will be less than 10,000 ‘financial advisers’ and that the majority of ‘risk advisers’ will be gone. Yes, the majority. I pretty much have my finger on the pulse of this one and I don’t say this lightly. It is not only written on the wall but carved into the gyprock. Think about this . . .

    The risk advisers (as was I) have a different and foreboding ‘challenge’ to regular full service financial planners/advisers. Not only do they share the irritation of the self-absorbed pollies and academics and extra (typically useless) ever increasing compliance burden but riskies are also having to deal with a declining risk market, stripped down IP products that defy any semblance of client best interest and life companies that aren’t interested in advisers anymore. The fact that commissions are already so low as to make it untenable to operate for many advisers is also a thorn in their side. Should anyone really be surprised or shocked at the continuing decrease in adviser numbers, especially riskies?

    Further, you have indifference from the disconnected and arrogant elite legals such as creatures like Hayne and his Royal Commission who, having zero experience in and knowing next to nothing of the subject matter, say that commissions should be banned and have the power to influence such.

    • You and Jeremy both articulated the position well. There are no positives to remain in this field and be rewarded properly. Further, your last paragraph is correct and Hayne didn’t know his subject or the industry. He however created a massive boom for his industry over this time. He will be remembered as a incompetent fool who destroyed so much value for our national interests long into the future

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