While the overall numbers of advisers across the industry saw a relative stabilisation over the last year, 2023 marked the first year after a four-year hiatus which saw advisers who were predominantly leaving the larger groups to set up their own AFSLs.
According to figures from Wealth Data, there were more than one hundred of new AFSLs created by advisers in 2023, but only two of them had more than 10 advisers, with the majority of the newly-established licensees being the so-called ‘micro AFSLs’.
Additionally, the proliferation of those small licensees, also referred to as ‘one-man bands’, coincided with the ongoing decline in the overall numbers of advisers which continued throughout 2023 although at much slower pace compared to prior years.
The data showed that in December 2023, there were 15,670 active advisers in Australia as opposed to around 15,800 at the start of the last year.
Adviser Ratings founder Angus Woods tells Professional Planner that the recent uptick in a number of licensees gathered pace in 2023 and is going to be a growing trend which – he expects – will continue throughout 2024.
He also noted that such a growth in AFSL number comes after four years (between 2019 and 2022), during a period where the industry was losing between 50 to 60 net licensees each year, mostly as a result of the “the clean-up of the industry” in the aftermath of the Hayne royal commission.
“We are definitely seeing a pickup in the trend in 2023 and it was the first time, I think, in about five years that we saw an increase in licensees,” Woods says.
“At that time, we still saw a decrease in adviser numbers. So, [advisers] move away not necessarily to the mid-tier dealer groups, they are setting up one those small one-, two-, three-man bands.”
Data provided to Professional Planner last year showed only three licensees with adviser numbers over 500, 13 over 250 and 23 over three figures.
From big to small