The latest industry statistics show the fall in the total number of financial advisers in the Australian market in the March quarter 2022 was less severe than the final quarter of 2021, but still new entrants to the industry during the same period were not high enough to make up for the decline in practitioner numbers.
The “Adviser Musical Chairs Report” spanning January to March 2022, published by Adviser Ratings, revealed the drop in financial planner numbers over this period was 1.06 per cent, a significant improvement from the 6.5 per cent decrease in practitioner numbers from October to December 2021.
“We saw the quietest quarter for exits in more than three years. There were 433 departures, compared with more than 1800 in the final quarter of 2021,” the study observed.
Adviser Ratings attributed this result to specific circumstances regarding the Financial Adviser Standards and Ethics Authority exam and was not confident the magnitude of the drop in numbers will be sustained.
“Last year’s surge in exits can be explained by the exam deadline, which drew a line in the sand for advisers who were undecided about whether to stay in the industry. With that deadline passed … there were fewer outflows this quarter, but we don’t see a three-month trend as a sign of stabilisation,” it noted.
“In fact, we still expect thousands more advisers to exit in the next few years.”
Further, the study showed the first quarter of 2022 only saw 70 individuals join the financial planning ranks, a statistic the ratings organisation said indicated the industry is continuing to experience a talent shortage.
“Despite the volume of new advisers rising slightly in the past year, we are yet to see a three-figure jump in industry entrants in a quarter,” it noted.
“As we’ve said before, the profession needs to do more to market advice to university students and career changers.”