Adviser numbers hit a crossroad despite promising figures

The 43 per cent decline in adviser numbers since 2018 and a projected 17 per cent increase in pre- and post-retirees over the next decade doesn’t bode well for the supply shortfall, according to Rainmaker Information.

However, a new report from the research house has suggested that there may be a silver lining, indicating that the number of advisers may be bottoming out.

With the figure having stagnated at around 16,000, it is projected to climb, as both the quarterly and rolling 12-month changes in adviser numbers are converging towards zero, the report showed.

Despite these promising signs, Rainmaker anticipated that adviser numbers will remain within the range of 15,000 to 18,000 by the end of the next decade.

“These projections affirm our view of the Quality of Advice Review’s anticipated positive impact on the industry,” commented Alex Dunnin, executive director of research and compliance at Rainmaker Information.

“However, it is important to note that even at the upper end of this range, adviser numbers may barely keep pace with expected consumer demand.”

In contrast to these figures, the number of Australian Financial Services Licenses (AFSLs) has fallen at only half this rate, dropping by 18 per cent.

Wealth Data made a similar connection last week, with adviser numbers dropping by eight for the week ending 9 November. Meanwhile, six new licensees had sprung up over the same period.

This followed the addition of eight licensees in the prior two weeks.

Speaking on Rainmaker’s results, Mr Dunnin emphasised the concerning disconnect between the licensing of advisers and the number of practitioners in the field.

“If these adviser numbers fall toward the lower end of the range, we risk facing a severe per-capita shortage of advisers available to serve the needs of pre- and post-retirees,” he said.

“The industry faces a critical challenge to ensure that the growing demand for financial advice is met adequately.”

“Australia’s financial advice industry must remain agile and proactive in finding innovative solutions to bridge the adviser shortfall, ensuring that financial advice remains accessible and reliable for all Australians,” Mr Dunnin concluded.