The number of advisers on ASIC’s Financial Adviser Register has achieved another milestone, falling below 17,000 with more advisers that have not passed the adviser exam coming off the regulator’s listing of licensed advisers according to Wealth Data.
The net change of advisers for the week is 132 bringing the total on FAR to 16,912.
Wealth Data director Colin Williams tells Professional Planner this was an issue raised by the Senate Economics Committee to ASIC earlier this year.
“There is a strange setup with ASIC and there’s a huge weakness when it comes to the self-licensed side,” Williams says. “Fundamentally, if you’re a self-licenced adviser your job is to do everything including dobbing yourself in when you do something wrong.”
ASIC told the parliamentary committee it had conducted a review of the FAR to check AFSLs had made the required notifications if an adviser they authorised had not passed the exam.
Licensees are required to report within 30 days when an adviser is no longer licensed. The deadline to pass the adviser exam was at the end of the 2021, which led to a significant drop-off at the end of January.
Williams says most of this week’s departures were not holistic financial advisers.
“The vast majority are not actually providing what I would call traditional financial planning/advice. Financial planning, for all intents and purposes, is a part-time job for them or something they might need to do from time to time. Many of them are accounts or investment advisers.”
In April, Adviser Ratings predicted the industry will go below 15,000 advisers by the end of the year.
Rise of the self-licenced
This week also saw the effective closure (defined by a reduction to zero advisers) of 47 small self-licensed AFSLs.
Williams says most of the losses this week were licensees giving limited advice and the self-licenced holistic adviser segment has seen significant growth this year.
“Whilst [limited advisers] are the ones that are closing, the ones operating on the financial planning side are actually growing rather rapidly now.”
Williams says he is seeing two to three new self-licenced advisers added to the FAR each week on average which amounts to over 50 for the year.
“They’re still growing and I can’t see that slowing. On the financial planning front self-licenced is no longer a fad. It is a trend and it’s very hard to see that trend changing any time soon.”