Accountants’ exemption a supply-side relief proposal, with baggage

Financial advice continues to struggle to attract new entrants at anywhere near the volume needed just to replace the number of advisers leaving, let alone to grow numbers, so it was only a matter of time before someone raised the idea of encouraging the country’s 30,000 or so accountants back into the fray.

That call has come from the Institute of Financial Professionals Australia (IFPA), which says urgent action is needed by the federal government to address “Australia’s financial advice capacity crunch”.

The capacity crunch is not in question. Whether it’s a feasible idea to tap accountants to make up the numbers is another question. There’s a bit of history to consider there, and more on that in a moment.

New data from Adviser Ratings, released on Thursday, puts the number of authorised representatives at a mere 15,084. Adviser Ratings says that with the FASEA education and experience pathways closing on 1 January 2026, another 391 advisers left in the past 12 months, and the numbers are down 46 per cent from a 2018 peak of 27,953. 

It should be noted that the 2018 figure was substantially inflated by a stampede of individuals onto the ASIC financial adviser register before the end of that year, so they could be classified as “existing advisers” and avoid having to sit the financial adviser exam that applied to “new entrants” after that date. Not all of them were engaged in actually delivering personal advice to retail clients.

Meanwhile, according to a March 2026 Financial Advice Association Australia (FAAA) submission to Jobs and Skills Australia (JSA), only 500 new advisers entered the profession in the whole of 2024.

Putting the roto-rooter down a clogged pipeline of new entrants isn’t a new issue. Among a number of factors, education standards that require a specialised financial planning degree to get in have really put a dampener on the inflow. 

Relatively few kids leave school with the express intention of becoming a financial adviser; it’s more likely that they’ll do an accounting or business or commerce or some other degree and only discover the allure of financial advice later on. It needs to be made much easier for them to change direction and career choice with full acknowledgement and consideration of the study they’ve already completed.

The FAAA’s submission to JSA called for financial advisers to be added to the 2026 Occupation Shortage List, potentially opening up sponsored skilled migration pathways to help fill the gap. 

In its submission the FAAA said the decline in adviser numbers is structural, not cyclical, and that it requires structural changes to address it. 

JSA says an occupation shortage occurs where employers are unable to fill vacancies or where they have considerable difficulty doing so “at current levels of remuneration and conditions of employment and in reasonably accessible locations”, particularly where there are significant specialised skills needed within that occupation.

Occupation in shortage

An occupation can be classified as being in shortage if that shortage is caused when there is what’s defined as a “long training gap”, or a long lead time for qualification and training, and consequently “a lack of qualified applicants”.

IFPA says that by resurrecting the so-called “accountants’ exemption”, up to 30,000 accountants could “re-enter a defined part of the advice market”.

IFPA president and chairman Scott Heathwood says “30,000 professionals is not a rounding error; it is a workforce”. 

“They are already in the room with clients, already trusted, and already doing the work around superannuation advice in everything but name,” he says. “If we are serious about closing the retirement advice gap, this is the kind of supply-side response we need. The Government should act.”

IFPA wants to “restore a modernised version of the old accountants’ exemption, covering clearly defined areas of superannuation advice provided by recognised accounting professionals”.

This would leave “every consumer protection in place while giving Australians access to the affordable super advice they need”, Heathwood says. 

“The scope of the exemption would include superannuation contribution strategies, transition to retirement strategies, advice on account-based pensions, and advice on structural and tax-effective retirement decisions.

“Investment advice, including portfolio construction, asset allocation and managed funds selection, would remain the domain of fully licensed financial advisers.” 

Getting accountants back into the advice game has some appeal, but whether financial advisers would feel good about allowing them back in and holding them to a lower level of accountability is another issue. This is where the history comes in.

Accountants used to enjoy an exemption from advice licensing requirements, provided the “advice” they gave to clients was “incidental” to their business as accountants.

In the maelstrom of reforms driven by FoFA, FASEA and the Hayne royal commission, there was a bit of tit-for-tat lobbying between advisers and accountants.

Accountants sought to protect their turf by pushing for financial advisers to be appropriately qualified and regulated to give tax advice. 

A couple of years later, financial advisers returned the favour by pushing for the accountants’ exemption to be removed, to stop accountants encroaching on what advisers saw as their domain.

In the wash-up, financial advisers were forced to become Tax (Financial) Advisers regulated by the Tax Practitioners Board, and the accountants’ exemption was terminated and replaced by a limited licensing regime regulated by ASIC.

Since 1 January this year, financial advisers have been required (unless grandfathered) to hold additional qualifications to be Qualified Tax Relevant Providers (QTRP) and regulated by ASIC.

It could be a hard sell to ask advisers to sanction allowing accountants back onto the field of play operating under the exemption they fought hard to eliminate back in the day.

The limited licensing regime is a bit cumbersome and onerous. Indeed, the Licensee Summit heard last week that Count – whose heritage is firmly rooted in the accounting profession – has closed down its limited authorised representative model because the accountants in the network just weren’t making enough use of it.

Hear me out

At this point, any measure to grow adviser numbers is worth at least hearing out. But it’s also worth bearing in mind that opening the sluices is (to mix a metaphor) a double-edged sword.

On one side there’s a national interest perspective, which says it’s in the nation’s interest that individuals have access to affordable advice to help them make the most of their financial situations, especially as they enter retirement clutching a lifetime’s worth of accumulated superannuation savings; on the other side, it’s the supply constraint that has underwritten the rapidly improving financial health of existing advisers and licensees. 

Adviser Ratings says that as advice supply has tightened, “the price of advice has risen sharply”.

“The median ongoing fee is now $4837, up 93 per cent since 2019. The result is a market of rarer, more valuable advice relationships, with around 1.92 million Australians now advised and median funds under advice of $755,000 per client,” it said.

The figures paint a picture of a “profitability boom among the practices that came through eight years of reform”. 

It says average practice revenue has climbed by 40 per cent since 2023 to $674,000 and the average net profit margin has climbed from 21 per cent a year ago to 23.3 per cent, its highest level in four years.

Almost three in 10 (28 per cent) practices now generate revenue of more than $1.5 million, and the proportion of practices that are unprofitable has plunged from 17.7 per cent to less than 10 per cent.

WT Financial Group managing director Keith Cullen told the Licensee Summit that “in 2018 we took the decision to run towards the [advice] opportunity when many others were heading for the exit, because we saw this emerging supply-demand imbalance”.

“I think superannuation was at about $3 trillion, maybe a bit over $3 trillion at the time. Adviser numbers had started to drop pretty dramatically, and so we saw this supply-demand imbalance emerging, and the wall of capital and a wall of people coming towards retirement, and we ran into the opportunity when others were running away.”

CoreData global managing director Andrew Inwood told the summit that “there is a massive supply-demand problem in this market… and demand for advice is only going to continue as this retirement wave rolls through. So, I think it is a really positive time for advice”.

Entireti’s managing director Neil Younger said “we need more advisers in this game, and nothing’s going to happen about that until we fix these ridiculous education standards, which the minister has committed to do and the opposition said they would support”.

“So, just politically, everybody needs to keep the minister’s and the opposition’s feet to the fire on transforming, reforming, getting back to sanity, the entry pathways into this profession, so that once we’ve got the capacity built, we can take it to the next level by recruiting the next 10,000 advisers, which will happen quickly.”