The precipitous decline in financial adviser numbers since the end of 2018 has prompted the Financial Advice Association Australia to recommend that financial adviser and paraplanner be added to the 2026 Occupational Shortage List, potentially opening up sponsored skilled migration pathways to help fill the gap.
In a submission to Jobs and Skills Australia, the FAAA says adviser numbers stood at around 15,100 as of 12 March this year, a 48 per cent decline from the 28,900 at the end of 2018, according to numbers from Padua Wealth Data.
While just over 500 new advisers entered the profession in 2024, with an estimated 700 to 1000 advisers leaving each year, this figure is “far below replacement levels”.
“This decline is structural, not cyclical,” the FAAA submission says.
“Retirement of older financial advisers, regulatory-change-driven exits, and the lengthy qualification process for new entrants all contribute.
“Despite this, consumer need for financial advice is rising. The consequence is a widening gap between supply and demand.”
Jobs and Skills Australia 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.
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”.
In its submission, the FAAA says it typically takes four to five years from the moment an individual commences study to when they’re qualified to practice as an adviser.
It says that after the completion of an approved degree or equivalent, the trainee adviser must undertake a full professional year (PY), pass the financial adviser exam, and meet continuing professional development (CPD) requirements.
Earlier this week, the Minister for Financial Services Daniel Mulino launched long-awaited consultation on financial advice education reforms, announcing that financial advisers will in future only need to complete four core financial advice subjects and four “financial concept” subjects as part of a Bachelor’s degree or higher qualification to meet the education standard.
The aim of the reforms is to make financial advice more affordable and more accessible to consumers by easing entry-level education requirements and increasing the rate of new entrants to the profession.
Even so, relaxing the standard is unlikely to lead to an immediate influx of appropriately qualified individuals to make up the current shortfall between new entrants and departing advisers.
Adding financial adviser to the JSA Occupational Shortage List would open temporary and permanent skilled migration visa pathways, potentially deepening the pool from which employers could recruit when they cannot find suitable candidates domestically.
The FAAA’s submission says paraplanning is an important step on the path to qualifying as a financial adviser, and it is common for individuals to work as paraplanners while still studying.
“It is important that this role and shortages related to this role are included in the JSA’s considerations,” it says.
“Indeed, most qualified overseas new entrants work in paraplanning roles until they complete Australian bridging units or degrees.”
It says a shortage of students graduating from Australian universities with financial planning qualifications and finding paraplanning or client service officer roles means many advice businesses are already looking to move these roles offshore themselves, or to outsource services to businesses located offshore.
“There is a funding and training gap creating a bottleneck in this crucial career pathway to becoming a financial adviser,” the FAAA says.
The FAAA revealed plans in 2024 to bolster growth in the advice profession through talent from overseas, specifically India, and has since signed a memorandum of understanding (MoU) with FPSB India, a subsidiary of the Financial Planning Standards Board, to promote cross-border mobility and development for aspiring and professional financial planners.
I cannot believe the degree of change that this industry has undergone. Depending on the numbers 12,000 to 15,000 advisers operating in the profession, many as sole traders, partnerships or family businesses, have left. Now we should attract advisers from overseas who have no idea of the Australian laws, regulations and investment tools? They will still need to do the professional year and be employed by an organisation of some type. This is ludicrous!
Fawlty Towers script writers could never come up with what is being proposed here.
Let us look at my example as to what a “great” system Australia has come up with.
I and most planners came into Financial Planning from other Industries because of an interest in and the opportunity presented, with a pathway that let us survive while we learned.
We did 39 years ago and continued to do, extensive ongoing training which was far more than the Legal profession and the system worked well, EXCEPT for the Regulatory process and monitoring process, which was farcical and still is today.
What we now have is a total disaster, where the fringe dwellers and vested interest brigades, have taken over and made Australia a “what NOT to do” Country, where we destroy the foundation of the Financial Planning model, by making it way too hard, expensive, time consuming and way too far removed from reality for potential new entrants to contemplate a career in this field.
Australians do NOT want Indians or any other people from other Countries to advise them, they want EXPERIENCED Australians who have LIFE EXPERIENCE and an innate understanding of Australia and the Australian economic system.
I and over twelve thousand experienced and qualified Australian Advisers exited as Advisers BECAUSE of the inept direction the Government bureaucrats, Education lobbyists, vested interest groups and numerous interventions that achieved the TOTAL OPPOSITE of the stated objectives and has led us down the current path via numerous mazes to no-where, except more Regulation, red tape and stupid suggestions that do not even put a band aid on the bleeding of the Investment and more so, the Life/Disability Adviser force.