100k consumers orphaned as adviser numbers dwindled

Adviser Ratings has predicted that with the recent exodus of advisers, as many as 100,000 consumers have either stopped seeing an adviser or were orphaned.

In an analysis piece published by the firm late last year, Adviser Ratings said that while adviser numbers dropped below 16,000 for the first time in 2022, there is cause for optimism with signs that the annual exit rate has slowed.

Namely, in 2021, more than 4,000 advisers left the profession; in 2022, the number of exits stood at around 1,000.

“While that is still a lot, it’s a quarter of what we saw the previous year and several thousand fewer departures than there were in the prior two years,” Adviser Ratings said.

“We still predict the workforce’s numbers will fall further as consumers continue to grapple with the impact of having 12,000 fewer advisers than there were in 2019,” the firm noted.

Moreover, Adviser Ratings’ analysis has shown that around 10,000 advisers would become qualified if the experience standard recognised advisers with 10 years’ experience in the last 12 years.

In December, Financial Services Minister Stephen Jones promised to have the provisions for the implementation of the experience pathway ready for legislation by mid-2023.

“I can advise you today that I am confident that we will have provisions ready for legislation in the first half of next year,” Mr Jones said while speaking at the Association of Independently Owned Financial Professionals’ (AIOFP) annual conference.

“Some of you may ask why the commitment for relief for experienced financial advisers or even changing the qualification framework for qualified financial advisers hasn’t already been done, well we can’t just do that with a stroke of a pen,” he continued.

Moreover, Mr Jones confirmed that the government would provide “consultation documents for the sector on those issues in the early months of next year”.

“It would be my hope that we’ve got legislation in the first half of next year through to Parliament so those things can be settled.”