The financial advice sector is facing its most significant capacity threat since the Royal Commission, with the January 2026 qualification deadline projected to cause a sharp drop in adviser numbers, says Adviser Ratings MD Angus Woods.
He warns the industry could see the total adviser count drop to below 12,000 if a substantial number fail to meet the looming education requirements. There are currently around 15,500 advisers.
However, with 4,604 advisers still not compliant with 2026 qualification standards, Woods described the situation as an “existential compliance crisis” that “would be devastating for accessibility”.
Woods noted these dark clouds could accelerate long-term transformation. With AI-enabled practices already reaching a 74% adoption rate, he said technology-forward firms are well-positioned to absorb displaced clients through enhanced capacity and efficiency.
He also pointed to the recent tax deductibility ruling for financial advice, saying it equips surviving practices with new tools to demonstrate value and affordability.
…technology-forward firms are well-positioned to absorb displaced clients…
While referencing ASIC’s heightened compliance actions, including targeting ‘finfluencers’ and multiple adviser bans, he welcomed the recent fee consent relief, which Woods said acknowledges the inefficiencies in maintaining soon-to-be-outdated regulatory frameworks.
Woods also supported the Financial Advice Association Australia’s endorsement of AFCA’s enhanced public reporting powers, stating it signals “professional maturity” and a willingness to embrace accountability to protect the industry’s reputation.
Looking ahead, he said that while political uncertainty remains around the DBFO reforms, he maintains top-performing practices will prioritise technology and family engagement strategies to capture market share in a consolidating sector.
