The numbers of financial advisers working across the advice sector continued to decline during the third quarter of this year, dipping just below 19,000, and is likely to reach 16,500 by year end, according to research firm Adviser Ratings.
In its most recent “Adviser Musical Chairs Report” on adviser movements, the firm found 505 advisers left the industry during the third quarter, reducing overall numbers to 18,901.
This was offset by 75 new advisers joining the industry following the completion of their provisional year, which, according to Adviser Ratings, was the highest number of new entrants in two years.
The report noted the rate of exits had slowed due to COVID-19 lockdowns in Sydney and Melbourne and there was also limited movement between licensees, “which was not surprising given the two largest states were confined to work-from-home arrangements [and] advisers were largely unable to audition for new prospective homes”.
“Compared with the same quarter last year, adviser exits were down 26 per cent. In fact, it was the quietest quarter for adviser departures in more than two years,” it said.
“However, it’s far too early to perceive this as a sign of workforce stabilisation. Instead, it’s most likely a combination of cyclical new financial year inactivity and the effects of the lockdown.
“We expect movement to accelerate in the coming quarter as the clock continues to tick on education standards deadlines.
“It was a stark contrast to the previous quarter during which almost 1500 advisers departed. As we said at the time, the end of financial year is a popular time to exit for advisers who wish to beat the ASIC (Australian Securities and Investments Commission) levy and often insurance renewals, too.”
Adviser Ratings added the drop in numbers to below the 19,000 mark was approaching the number of advisers who had sat the Financial Adviser Standards and Ethics Authority (FASEA) exam by September and while 16,850 had passed, only 14,630 were still recorded as active financial advisers on the ASIC Financial Adviser Register.
“With the latest FASEA exam results released, we are predicting remaining advisers as at 1 January 2022 to decline to 16,500 (a 42 per cent decline in three years despite unprecedented demand for financial advice),” it said.
