{"id":58373,"date":"2021-11-02T13:44:50","date_gmt":"2021-11-02T02:44:50","guid":{"rendered":"https:\/\/riskinfo.com.au\/news\/?p=58373"},"modified":"2025-03-14T12:02:28","modified_gmt":"2025-03-14T01:02:28","slug":"adviser-numbers-to-drop-to-16500-by-end-of-the-year-prediction","status":"publish","type":"post","link":"https:\/\/riskinfo.com.au\/news\/2021\/11\/02\/adviser-numbers-to-drop-to-16500-by-end-of-the-year-prediction\/","title":{"rendered":"Adviser Numbers to Drop to 16,500 by End of Year &#8211; Prediction"},"content":{"rendered":"<div class=\"header row\">\n<div class=\"intro\">\n<h3>It&#8217;s often the bad news that can rate the best, which is the case for our Story of the Week, as we reported the further projected decline in adviser numbers by the end of 2021&#8230;<\/h3>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.adviserratings.com.au\/\" target=\"_blank\" rel=\"noopener\">Adviser Ratings<\/a> is forecasting there will be 16,500 advisers for the start of 2022 after FASEA\u2019s exam regulation comes into play, a drop of 20 percent year on year.<\/p>\n<p>The company\u2019s latest <em><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/211028-Musical_Chairs_2021_Q3.pdf\" target=\"_blank\" rel=\"noopener\">Adviser Musical Chairs Report<\/a><\/em>, highlighting financial adviser and licensee movement for the third quarter of 2021, predicts that with the education standards deadline still on the horizon, several thousand advisers will depart the industry in the next few years:<\/p>\n<p>\u201cIn fact, we forecast there are still close to 5,000 advisers who will depart before numbers stabilise.&#8221;<\/p>\n<p>The firm told Riskinfo the drop to 16,500 advisers forecast by the end of this year takes into account:<\/p>\n<ul>\n<li>Existing advisers yet to pass the FASEA exam by 31 December, offset by the extension to 30 September 2022 for those advisers who have failed twice before the end of 2021. With only the November round of exams remaining before the end of this year, Adviser Ratings expects approximately 2,000 advisers will no longer be allowed to practice from 1 January 2022 (this also takes into account current pass rates).<\/li>\n<li>Organic retirements already coming through, especially those from limited licensees, together with risk advisers, who continue to exit the industry at a rate of 2.5 to 1 greater than the average wealth adviser<\/li>\n<\/ul>\n<p>The report notes that the adviser workforce has now dropped below the 19,000 mark, which is getting closer to the number of advisers who had sat the FASEA exam by September (19,000) and that around nine in ten, or 16,850, have now passed their exam.<\/p>\n<p>Nevertheless, it says, only 14,630 out of those were recorded as active financial advisers on ASIC&#8217;s Financial Adviser Register at that time.<\/p>\n<figure id=\"attachment_58380\" aria-describedby=\"caption-attachment-58380\" style=\"width: 333px\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/musical-chairs-1.png\"><img loading=\"lazy\" decoding=\"async\" class=\"size-full wp-image-58380\" src=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/musical-chairs-1.png\" alt=\"\" width=\"333\" height=\"490\" srcset=\"https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/musical-chairs-1.png 333w, https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/musical-chairs-1-204x300.png 204w, https:\/\/riskinfo.com.au\/news\/files\/2021\/11\/musical-chairs-1-285x420.png 285w\" sizes=\"auto, (max-width: 333px) 100vw, 333px\" \/><\/a><figcaption id=\"caption-attachment-58380\" class=\"wp-caption-text\">Industry Overview Q3 2021. Courtesy of Adviser Ratings.<\/figcaption><\/figure>\n<p><strong>Flight risk analysis<\/strong><\/p>\n<p>The report includes a special feature which shows that trends are beginning to emerge around the types of advisers who are choosing to depart, along with a &#8216;flight risk&#8217; analysis.<\/p>\n<p>The report says an adviser\u2019s \u2018flight risk\u2019 is their likelihood to depart the industry in the next two years and that it\u2019s an assessment based on a number of factors, including behaviour, qualifications, age and personal intentions.<\/p>\n<blockquote><p>&#8230;if looking at advisers who have already left the industry, more than half had a \u2018high\u2019 flight risk score&#8230;<\/p><\/blockquote>\n<p>Adviser Ratings says if looking at advisers who have already left the industry, more than half had a \u2018high\u2019 flight risk score, while a further two-in-five had a \u2018moderate\u2019 flight risk rating.<\/p>\n<p>\u201cCollectively, more than 90 percent of those who have left showed some early indications that they were on their way out,&#8221; the report states.<\/p>\n<p>\u201cWhen we turn our attention to current advisers, six percent \u2013 or roughly 1,100 advisers \u2013 have a \u2018high\u2019 flight risk. We are fairly confident these advisers will exit the industry in the next two years.\u201d<\/p>\n<p>Meanwhile, the report says a quarter of the remaining advisers \u2013 roughly 4,800 \u2013 are at \u2018moderate\u2019 risk of departure.<\/p>\n<p>\u201cThese advisers have a higher propensity than the average adviser to depart the industry.\u201d<\/p>\n<p>It says that putting it all together, more than 30 percent of the current workforce \u201c\u2026is at least a moderate flight risk. In other words, almost a third of advisers (31.6 percent) are showing signs of potential departure.\u201d<\/p>\n<p>The report says that while Adviser Ratings doesn\u2019t expect flight risk to translate into departure in all cases, \u201c\u2026these early indications should raise the alarm. With an impending mass exodus on the cards in the next two years and just a trickle of new talent, many Australians in need of financial advice will struggle to find it.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s often the bad news that can rate the best, which is the case for our Story of the Week, as we reported the further projected decline in adviser numbers by the end of 2021&#8230; Adviser Ratings is forecasting there will be 16,500 advisers for the start of 2022 after FASEA\u2019s exam regulation comes into [&hellip;]<\/p>\n","protected":false},"author":24,"featured_media":58395,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6994,8291],"tags":[],"class_list":{"0":"post-58373","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-education","8":"category-story-of-the-week"},"_links":{"self":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/58373","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/users\/24"}],"replies":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/comments?post=58373"}],"version-history":[{"count":0,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/posts\/58373\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media\/58395"}],"wp:attachment":[{"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/media?parent=58373"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/categories?post=58373"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riskinfo.com.au\/news\/wp-json\/wp\/v2\/tags?post=58373"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}