‘Micro AFSL’ surge creates new challenges for industry stakeholders

The latest insights from Wealth Data have pointed to a steeper uphill battle for business development managers (BDMs) as they navigate through a rapidly expanding landscape of licensees.

Namely, the industry has seen the addition of 76 new licensees this year alone, and a total of 491 since 2020.

According to Wealth Data founder Colin Williams, almost all of these are micro-AFSLs. Namely, recent data showed that back in 2019, there were 568 licensees with up to two advisers – that number now sits at 869.

This growth in micro-AFSLs has complicated the job for BDMs, according to Mr Williams. Namely, where back in the day, they would reach some 70 per cent of the industry by knocking on just six doors, today, the landscape is much more intricate.

“The doors would have belonged to the big four banks, AMP and Insignia (IOOF). And that 70 per cent of advisers would have been a lot more than the total current number of advisers,” said Mr Williams.

“Today, the landscape has changed dramatically. As the banks pulled out, their licensees have been sold or left to dissolve on their own accord.”

Adviser movements this week

Regarding adviser numbers this week, Wealth Data reported an exit of 12 advisers, taking the total to 15,700.

While the net change of advisers this year to date (YTD) remains in the red, with a loss of 99, change for the new financial YTD stands at a gain of 134.

Overall, the week saw a moderate level of activity with 70 advisers affected by appointments or resignations, in addition to the introduction of two new entrants.

Moreover, one new licensee came into the scene while one ceased operating.

Twenty-two AFSLs had net gains of 26 advisers, with the newly established licensee nabbing two from Fortnum.

LFG Financial, Castleguard Trust (Lifespan), and AD Financial Services each welcomed two advisers, all switching across from Nextgen, owned by Financial Link Group.

This week, 18 licensee owners each had gains of one adviser including Steinhardt Holdings (Infocus), Morgans, Centrepoint, and Insignia which appointed three and lost two advisers.

However, 24 AFSLs had a net loss of 37 advisers, with Financial Link Group leading the charge with a loss of 10. Of this number, five have been appointed elsewhere.

Four licensees were down by two advisers each, including AMP Group, which appointed one and lost two, and Fiducian, which hired a new entrant but lost three advisers.

Moreover, 19 licensees were down by one each including Capstone, Diverger, Shartru, and WT Financial Group. The lone licensee that ceased also only had one adviser.