Late losses thwart improving financial year adviser numbers

According to Wealth Data analysis, the 2023–24 financial year ended with a net loss of 211 advisers from the profession.

This was despite the figures spending most of the financial year in the green, but the positive signs were dashed by a flurry of exits to close out the period – between 16 and 30 June, there was a net loss of 236 advisers.

However, even with the heavy losses late in the financial year, it was still a stronger result than FY22–23, which saw a net loss of 633 advisers, with Wealth Data founder Colin Williams attributing the “severe” losses to final FASEA Exam for existing advisers in September 2022 resulting in a larger number being removed from the Financial Adviser Register (FAR).

Looking at the number of new entrants joining the advice profession, Wealth Data said there were 376 that entered for the first time in FY23–24.

“The math shows that a net loss occurred of (-599), between those that have resigned and ceased (975) and new entrants that are ‘current’ (376). The actual net loss for the financial year is (-211). The variance between the net losses is 388,” Williams said.

“This variance are advisers who have found a way to get back into advice. We know from previous media releases from ASIC, that there are some 4,000 ‘candidates’ that have passed the Financial Adviser exam but are not current on the FAR.”

Licensee landscape

The financial year saw 117 new licensees open and 77 close, according to Wealth Data, a slightly better ratio than in FY22–23 when 125 licensees opened and 92 closed.

Among the 92 new licensees that fall within the financial planning category, none currently have 10 more advisers – 51 only have one adviser, 25 have two advisers, 11 have three to four advisers and five have five to nine advisers.

Similarly, there is currently one financial planning licensee that began in FY22–23 that has 20 or more advisers, while more than half have either two or one advisers.

In terms of licensee growth, Centrepoint led the way with a net increase of 41 advisers, followed by Shaw and Partners (up 30) and Lifespan (up 19).

On the other end of the spectrum, Count lost 102 advisers, AMP lost 73 and Insignia fell 54. Wealth Data did, however, note that licensees that had made acquisitions also inherited the losses of the purchased licensees.

This included Count, WT Financial Group (which fell by 42 advisers), Fortnum (down 35) and Infocus (down 15).

Count’s Merit Wealth, which was previously part of Diverger, has driven most of its losses, with a large number being ‘restricted’ advisers who generally only provide SMSF admin advice. Count also purchased Affinia in May 2023 and progressively moved most of the advisers to the ‘Count’ licensee.

Similarly, WT Financial Group purchased Millennium3 from Insignia late last year, and the newly acquired licensee accounted for 33 of the group’s overall losses.

Personal Financial Services, which Fortnum purchased from Australian Unity, accounted for 18 of the group’s losses, while Infocus’ newly acquired Madison accounted for 16, singlehandedly taking the overall number into the negative.

Movement this week

In the week to 11 July, there was a net growth of 39 advisers as the new financial year continued its strong start.

“Many of these advisers had ceased in the previous financial year and ‘switched’ to their new licensee, at the beginning of this financial year,” Williams said.

Last week, which included the last three days of FY2023-24, saw a net decline of 78 advisers following 81 in the previous week to a total of 159 losses. Williams said the losses over the two weeks were “a lot more than he thought” given earlier gains.

This led him to conclude that overall sums for the 2024 calendar year will be worse than initially expected despite a strong start to the year.

Before this week’s growth, there had been six consecutive weeks of losses in the lead-up to the new financial year.

Williams added: “It was another productive week for new entrants, with 21 new advisers registered, bringing the total to 41 for the beginning of July. I presume that there is some advantage in starting new advisers after June 30.”

Looking at the growth, 39 licensee owners had net gains of 54 advisers in total. Insignia Financial welcomed seven advisers to its ranks after it appointed five new entrants, saw one adviser join from Centrepoint’s Alliance Wealth and another switch internally after a short break.

AvalonFS were up by six advisers, however, all six had ceased in late June and were then reappointed in the first week of July, Williams noted.

Four licensees increased by two advisers each. This included a new licensee which commenced with advisers who were previously at Advice Evolution.

A long tail of 33 licensee owners were up by one adviser each, including Fortnum, Centrepoint, Capstone Financial Planning and another new licensee.

In terms of losses for the week, 12 licensee owners had net losses of 13 advisers in total. AMP Group declined by two advisers, with three ceasing then backdating into June and one joining from Godfrey Pembroke.

A short tail of 11 licensee owners lost one adviser each, such as Findex Group, Infocus, Morgan Stanley and a licensee that closed down.