Increased super withdrawals present an opportunity for advisers

Wealth Data has delved into the details of the Australian Prudential Regulation Authority’s (APRA) 2023 Q4 super fund data and released its analysis, revealing an opportunity for advisers to look after super members.

The analysis also pulled in Wealth Data’s own financial adviser data and population figures from the ABS, plus SMSF data.

Wealth Data founder Colin Williams said there is opportunity for advisers as assets and the Australian population both continue to increase.

“The data also shows that over recent quarters, there has been a steady upturn in super benefits being withdrawn and is now close to the level last seen during the COVID era,” Williams said.

This increase in withdrawals presents an opportunity for financial advisers to increase their assets under advice (AUA) as more funds are liquidated by superfund members.

The data revealed the total super assets divided by the number of advisers in Q4 was $226 million, an increase of $9 million from Q3, which came in at $217 million per adviser.

Wealth Data also looked at the 2018 Q4 data, which showed that the total super assets per adviser was $88 million, or $138 million lower than the current per adviser number.

Williams said this has been driven by the sharp reduction in advisers since 2018, which also means that the opportunities for the 15,625 remaining advisers is greater with less market saturation.

Wealth Data further added that the net contributions dipped this quarter, coming in at $12.68 billion, compared with $13.10 billion the prior year.

“However, on a rolling 12 months, the reduction was more pronounced with total net contributions at $57.74 [billion] versus $64.06 [billion]. Much of this is due to a higher rate of benefits being paid out,” Williams said.

Benefits paid out reached $111.08 billion over 2023, compared with $91.43 billion in 2022. This comes just shy of the record high of $112.96 billion that was paid out over a rolling 12-month period during COVID-19.

Movement this week

There was a net loss of nine advisers during the week, according to Wealth Data, with 74 advisers active with appointments and resignations, leaving the current number of advisers sitting at 15,625.

Since the beginning of the calendar year, there has been a net increase of 12 advisers, while the profession is up 71 for the financial year-to-date.

“Seven new entrants commenced, indicating that for another week in a row, 16 more experienced advisers exited the ASIC FAR,” noted Williams.

Meanwhile, four new licensees commenced this week and three have ceased.

Looking at the weekly declines, The Financial Link Group (Nexgen Financial) lost their remaining three advisers following ASIC’s formal cancellation of their licence, while three licensee owners are down by two advisers each, including Count, Capstone, and a licensee going to zero advisers.

Clime Group, Morgans, and Tynans were among the 23 licensee owners that decreased by one adviser each.

In terms of growth this week, 16 licensee owners increased by one adviser each, such as WT Financial Group, Steinhardt Holdings (Infocus), and LFG Financial Services.

Five licensee owners increased by net two advisers including Assetly Australia, Focused Financial Advice, HNW Group Holdings, Verse Wealth Licensee Services, and Australian Pacific Funds Management.