Advisers contract 10% in 1 year, but experts warn ‘the worst is yet to come’

New figures from Wealth Data have painted a disappointing picture of the industry, with as many as 2,189 advisers said to have departed from the industry this year alone, a decrease of 10.61 per cent.

But Wealth Data believes the worst is yet to come as the number of those either failing or opting out of the FASEA exam rises.

“The losses for the year may end up close to 3,500,” Wealth Data’s Colin Williams said in a recent update.

“We still have a few weeks to go and I suspect there will be a fair bit of reporting in January that will be backdated into December. That said, below is how things are sitting right now,” he noted.

According to the data, the investment advice peer group suffered a loss of 102 advisers or 2.98 per cent, while the accounting – limited advice group contracted by 537 advisers or a whopping 27.12 per cent.

“We expect this peer group to suffer this greatest losses, at a proportional level, resulting from advisers not passing the FASEA exam,” Mr Williams said.

The largest peer group, financial planning, was down 1,303 or 10.18 per cent.

As for individual licensees, Wealth Data revealed that Insignia, formerly known as IOOF, and AMP suffered the largest number of losses.

As a whole, the industry is expected to kick off 2022 with 17,227 advisers, as more than 1,000 additional advisers are predicted to drop off the ASIC Financial Adviser Register (FAR) shortly.

According to Wealth Data’s calculations, the number of advisers will continue to decline in 2022 to between 15,000 and 16,000.