Institutionally-owned advice networks have worn the brunt of the advice industry’s contraction over last 12 months, Professional Planner’s Licensee Owners list 2020 will reveal.

The advice industry has shrunk almost 18 per cent since this time last year in the face of new education standards, the banning of grandfathered commissions and more intense scrutiny of conflicts of interest following Hayne’s Royal Commission into misconduct.

The full Licensee Owners List and analysis of adviser licensee preferences will be released at the start of June and discussed at Licensee Summit Digital, a four-hour live-streamed event to take place on June 2.

Sign up here to take advantage of early bird pricing for Licensee Summit Digital.

Five thousand and twenty-five advisers have left the industry in the last 12 months, while a meager 78 new authorised representatives joined the industry during this period, analysis of ASIC’s financial adviser register conducted by CoreData will show. The researcher pointed out that the number of new entrants to the industry is inflated considering at least half have joined timeshare schemes, an area that continues to be a focus for the regulator.

But it’s the bloodletting of advisers from the institutionally-owned licensees that will be a feature of this year’s list and subsequent analysis.

AMP’s adviser numbers are down more than 400 compared to last year, a trend which is expected to continue as more advisers leave this network.

IOOF has seen its net number of advisers decline by 59 in the last year.

There are more than 500 fewer advisers at National Australia Bank compared to this time last year, the data shows.

CBA, meanwhile, has dropped out of the top 10 licensee owners list after selling its stake in Count Financial, closing its Financial Wisdom dealer group and recently selling off a controlling stake in its wealth business to private equity. CBA has shed 1,112 advisers in the last 12 months.

In all, the advice industry comprises of 2196 licensee brands, 2,139 licensee owners and 23,322 advisers who are either authorised representatives of a licensee or self-licensed.

While the analysis of the data continues and qualitative data is collected relating to adviser preferences, the majority of advisers departing institutionally-owned networks are likely to be leaving the industry, not joining other licensees, according to Simon Hoyle, CoreData’s head of market insights.

To add to the data set which provides insights into what advisers are looking for in a licensee and where they are going, please fill out this brief survey.

“Many of the advisers leaving institutionally owned networks it sees are leaving the industry,” Hoyle notes.

“From the adviser preference data we are finding many advisers within the large networks have decided that now is an opportune time to pack it in; they might be among the older cohort and aren’t interested in meeting new education standards,” he said.

“There are also some leaving these networks because of dissatisfaction with what their licensee has to offer.

“And of course some are leaving the institutional licensees because the institutions have shut down licensees.”

Another significant trend in the licensee owners list that will be explored in coming weeks is the gradual mopping up of individual self-licensed advisers.

The number of self-licensed advisers peaked in the mid-900s some 18 months ago, comparisons of licensee data shows.

Today the number of individual self-licensed advisers stands at 820 and continues to reduce as those advisers hand back their licenses, band together or join medium-sized licensees, the data shows.

Smith is head of content and managing editor of Professional Planner and Investment Magazine.
One comment on “A year of bloodletting: Advisers turn their back on advice”
  1. Avatar Jeremy Wright

    5025 advisers leave the Industry and 78 join, half of which, joined time share schemes.

    You would hope the Government and the Regulators can see that their Great Leap Forward, has many similarities to the Chinese program in the 60’s, where rigid policies and unworkable standards, were established and enforced by beaurocratic robots, which led to massive upheaval and chaos.

    The problem is way too much red tape and confusing Regulation.

    If the Biggest Institutions, with Billions of dollars at their disposal, walk away from an entire Industry due to it’s complexity, increasing costs and a never ending threat of penalties if every rule is not followed to the letter, then what chance do smaller Licensees have?

    The path taken, is well worn and for 2 thousand years, the main cause of complexity, confusion and an inability to see the blindingly obvious, ( Lawyers and Public servants ) have proliferated and led us to where we sit today.

Leave a comment