The multi-thousand annual losses of advisers may have stemmed in the past few years, but calendar year data for 2024 still shows the profession is in a net loss.
The current, preliminary data from Wealth Data – the researcher’s director Colin Williams said a full update will come later in the month due to the 30-day timeframe licensees have to report changes – shows there is a net loss of 143 advisers in 2024, with 15,481 advisers listed on ASIC’s Financial Adviser Register.
Despite failing to reach a positive number, this drop is still a “better result”, Williams noted, when compared to 2023 which saw 181 leave the profession.
The low three figure numbers of losses pale in comparison to the years between the conclusion of the Hayne royal commission in early 2019 and the deadline for advisers to have completed the financial adviser exam by the end of 2021.
The years succeeding the royal commission saw adviser departures average a few thousand a year from circa 28,000 to numbers dropping below 18,000 after the exam deadline.
Most advisers were required to pass the financial adviser exam by the end of 2021, but those who had failed the exam at least twice were given an extension to 30 September 2022.
It was after that conditional extension that departures steadied, and the last few years have seen numbers settle in the 15,500-16,500 range.
To replace those numbers, the profession required a stream of new advisers coming through the university system and to do their professional year (PY).
The PY requirement came in place at the start of 2019 which required a year of full-time equivalent work – measured at 1600 hours – including 100 hours structured training, for example pursuing a professional designation or ethics bridging units.
It was a “solid year” for new entrants, according to the researcher – 505 advisers commenced their PY with 476 still currently doing it, compared to the start of 2023 which had 408 commence.
It’s a material increase since when the PY regime begun when the first couple of years saw registrations in the double-digits, but it’s fallen short of what the former education authority was expecting for the profession.
In 2021, the CEO of the now-defunct Financial Advisers Standards and Ethics Authority, Stephen Glenfield, proclaimed there was a pipeline of upwards of 3000 students studying financial advice.
“In terms of the pipeline it’s not just those that have joined today, look at whose studying the FASEA-approved degrees – it’s going through the roof,” Glenfield told Professional Planner.
The lack of a new generation of advisers to replace the ones that have departed had since forced the current Labor government’s hand by giving an education carve-out to advisers with over a decade of experience and the expansion.
Elsewhere, the latest Wealth Data research showed 118 new licensees commenced, with 97 ceasing in 2024 (versus 114 commencing and 63 ceasing in 2023). Of the 97 that ceased last year, 78 (80 per cent) commenced before 2021.
Leading licensee owners for growth are Centrepoint at 39, closely followed by Finchley & Kent at 37 and Picture Wealth at 34.
The least growth by licensee owners is Entireti, which lost 90 advisers. However, 59 of those were from AMP licensees which Entireti acquired mid-last year in a blockbuster deal that meant the largest licensee owners were no longer institutionally-owned.
Count also lost 74 with most of their losses coming from the Merit Wealth licensee, a limited advice provider that the firm doesn’t count within the adviser numbers it presents to the market.
“Personally, I see [Merit] as quite a different business model,” Count CEO Hugh Humphrey said last year.
“We’ve not included limited [authorised representatives] AR numbers in the overall AR, it’s really looking at the holistic financial advisers there.”
