The end of the financial year has seen the advice industry contract by almost 600 planners, largely impacted by the final adviser exam deadline last October.
Analysis of the ASIC Financial Adviser Register by Wealth Data showed a net loss of 599 advisers for a final tally of 15,584 registered planners to close the financial year.
The researcher noted specifically 1429 advisers departed the industry with only 457 advisers joining.
The industry had around 28,000 advisers on the FAR at the start of 2019, eventually reaching under 16,000 after the final adviser exam deadline last October, stabilising at around the 15,800 mark.
FY23 included the extended FASEA exam deadline which Wealth Data previously noted included almost 1000 potential sitters, many who were unlikely to take the exam but used the extension to get succession planning in order.
At that time, the researcher noted a loss of almost 450 advisers because of the October exam deadline.
The former Minister for Financial Services Jane Hume announced a nine-month extension for advisers who failed the exam twice, which the minister said would give advisers a “clearer run” due to disruption from the Covid-19 pandemic.
The last adviser exam before the September deadline had a pass rate of 52 per cent with 628 candidates sitting.
While several hundred departed advisers is a significant number, it paled in comparison to the close of the previous financial year which saw over 2500 departures which included the losses from the first adviser exam deadline.
The unconditional exam deadline was the end of 2021, but final month of the year had already commenced an exodus that saw over 1000 advisers leave by February.
The drop off over the 2023 financial year was 3.7 per cent – significantly lower the 14.58 per cent drop off from the proceeding financial year.
Wealth Data founder Colin Williams tells Professional Planner that if meteoric industry events like the FASEA regime or other regulatory changes are excluded, it should be expected that around 5 per cent per year will leave no matter the profession.
“I did some stats over the year, and I’ve come to the conclusion that at any particular point in time – putting FASEA to one side – you’re always going to lose around 5 per cent of your work force every year,” Williams says.
“You need 700-800 new ones a year to come on to make up for that and we’re not there yet.”
Since the start of the new financial year, the number has increased to 15,699 which includes 115 advisers either being added or returning to the FAR.
For the “financial planning” subsector that covers financial planners but excludes other areas like super fund advisers, limited licensees or investment advisers, the number is 10,457.
