The number of financial planners and advisers in Australia has held steady despite changes to the advice industry and more of them are choosing to become self-licensed, recent analysis has revealed.
According to Investment Trends’ “2020 Planner Business Model Report”, the number of financial planners in Australia remained at 17,500 during the 2020 financial year despite significant market volatility and regulatory changes.
Investment Trends research director Recep Peker said: “Financial planners remain resilient against a shifting regulatory landscape, disruptions from major players entering and leaving the wealth management space and the recent pandemic-induced market volatility.
“Similar regulatory challenges have impacted the UK advice market in the past decade, reducing their planner headcount by 20 per cent, further highlighting the strength of the Australian advice industry.”
The report, based on a study of 693 financial planners in May, revealed only 4 per cent of those surveyed intended to stop providing advice in the coming year, with a further 3 per cent indicating they would stop providing advice in the following year.
The study also showed a higher number of planners were choosing to become self-licensed, with 30 per cent either holding their own Australian financial services (AFS) licence or working for a boutique AFS licensee.
“More planners are heading down the self-licensing route, whether by choice or structural changes in the industry. As the dynamics of the advice market evolve, so do planners’ support and service needs,” Peker said.
According to the report, as much as 92 per cent of all self-licensed planners outsourced or used third-party expertise for compliance and audits, research, professional development and paraplanning.
“All planners – whether self-licensed or part of a licensee network – seek greater support from providers across the financial planning value chain,” Peker added.
Last month, Investment Trends’ “2020 Planner Technology Report” found more financial planners were leaning on digital-based tools to meet their client needs as a result of the COVID-19 shutdown, but many felt they were not receiving the level of technological support they required.