Disciplinary actions against financial advisers declining

According to analysis from Wealth Data, the Australian Securities and Investments Commission (ASIC) has handed down, on average, about 20 disciplinary actions (DAs) each of the last nine years, but the numbers are trending down.

Of the 175 advisers with DAs, 48 of them do not have an end date, which Wealth Data said generally means that the advisers have been banned.

The year with the most DAs was 2019 with 34, followed by 26 DAs each in 2017 and 2018, and 24 DAs in 2016. More recently, in 2020, 17 DAs were handed out followed by 12 in 2022, signifying a significant downward trend.

Wealth Data founder Colin Williams said: “In percentage terms the numbers are very low. For example, in 2019 the average number of advisers was 25,712 and with 34 DAs that is only 0.13 per cent of the advisers or one in every 756 advisers.

“Given the level of scrutiny post the royal commission, these figures may seem very low.”

So far this year, only four DAs have been handed down, however, Mr Williams noted that the figures may require some time to align with the actual situation.

“When looking at 2023, the number is currently at four. When reviewing media releases from ASIC for ‘advisers’ there are many more than four for 2023. What often happens is that a media release relates to a case that commenced pre-2023.

“For example, in the latest case, the banning of an adviser from QLD that was released by ASIC on June 6, 2023, the banning order took effect from September 2022.”

In terms of recent adviser movements, Wealth Data said it has been a “busy week” with 92 advisers affected in some way and six new licensees commencing in the week to 8 June, which Mr Williams said indicated that the growth of micro AFSLs is continuing.

The industry contracted by a further four advisers during the period, down to 15,813, with seven new entrants to the Financial Advisers Register (FAR).

One new licensee commenced with six advisers, while another started with five. Insignia and Centrepoint were among three licensee owners that grew by net two advisers.

There were also 24 licensee owners up by one adviser each, including Findex, Count Group, Diverger, and Capstone.

Beyond Bank saw the biggest losses for the week to 8 June, losing six advisers, while ANZ Bank had four advisers cease.

Clime and Morgan Stanley were among the three licensee owners that lost two advisers each, while 25 licensee owners lost one adviser each, including Evans Dixon, Picture Wealth, PSK, and AMP group.