2024 adviser exodus predicted to be less severe

The financial advice industry saw a net growth of eight advisers in the week ending 23 May, driving the 2024 calendar YTD growth to 22 advisers.

“At the same time last year, we were up by 24 advisers, so the numbers are very similar,” noted Williams.

Speaking to ifa’s sister brand, Money Management, he expressed optimism that more advisers will remain in the industry compared to 2023.

“We seem to be tracking very similar to last year, which is good because we’re not going backwards at the rate we were used to. Having said that, last calendar year ended up being down approximately 180 advisers,” he commented.

“[The total loss for 2024] might not be so severe. This year we’re coming off a steadier time. This time last year was steady but still quite volatile because the financial adviser exam was still relatively fresh and there was some confusion over their experience pathway. Whereas now, I think many advisers believe most of that is under control now.”

Reflecting on conversations he’s had with advisers, Williams observed many are positively focused on the future of the industry, rather than questioning if they will exit altogether.

He added: “If you turn the clock back a while ago, it was difficult to see your future because you didn’t know how many advisers we would have left and people were stressed about passing the exam, the experienced pathway and all that.

“Everything now is much more steady and clearer. People are more focused on the future now so I don’t think [2024’s net change] will be as volatile.”

Earlier this week, ASIC released further guidance for both advisers and licensees on how they can access the experience pathway.

The experienced provider pathway allows financial advisers with at least 10 years of experience between 2007 and 2021, to meet qualification standards without further education. They must also have a clean disciplinary record as of 31 December 2021.

To access the pathway, financial advisers need to make a written declaration and give a copy to their authorising AFS licensee(s) before 1 January 2026.

Weekly movements

Another eight new entrants joined the profession this week, continuing the growth trend observed recently since the latest adviser exam. Some 21 new advisers joined last week, while 14 were welcomed the week prior.

Nearly 60 advisers were active with appointments and resignations this week, while four licensees ceased operations and one recommenced.

Looking at the growth over the week, 27 licensee owners had net gains of 38 advisers in total.

This was led by the new licensee which recommenced under a new Australian financial services licence (AFSL).

“Technically, it is a new licensee, despite most advisers ceasing from the old licensee and switching to the new one, on the same day. The number of advisers switching was seven while eight ceased,” said Williams.

AMP Group brought five advisers into its ranks, including one new entrant, two coming back to advice after a break and two from different licensees.

Lifespan Financial Planning increased by two advisers, with one being a new entrant and the other joining from Wealth Trail.

Some 24 licensee owners gained one adviser each, such as Morgans Group, Bombora Advice, and Koda Capital.

Meanwhile, 21 licensee owners had net losses of 30 advisers all up. Insignia Financial lost two advisers from Consultum who have not been appointed elsewhere to date and Morgan Stanley was also down by two advisers, with both not showing as being reappointed elsewhere.

A tail of 18 licensee owners decreased by net one adviser each, including Centrepoint Alliance, Steinhardt Holdings (Infocus), and Wilsons.

“The three remaining licensees that closed only had one adviser each. One ceased after starting in quarter one this year,” Williams added.