False starts amongst new advisers
The financial advice profession not only continues to struggle to attract new entrants but also faces the reality that in 2023 10% of those new entrants decided that it was not a career for them.
That attrition rate has declined so far in 2024, but the analysis from WealthData paints a worrying picture for the profession where the number of exits still exceeds the number of new entrants.
Right now, there are 15,507 advisers on the Financial Adviser Register and this means that 114 advisers have fallen off the register since the start of the calendar year.
WealthData’s Colin Williams points out that while the number of new entrants has been relatively consistent over the first three quarters, so too have the numbers of those people who have then exited after less than a year.
Comparing new entrants across 2023 and 2024, Williams said that for the first three quarters, the grand totals are similar: 95, 93, and 131 for 2023, compared to 85, 94, and 125 for 2024.
“However, in 2023, 10, 9, and 14 new entrants left, meaning over 10% of new entrants have ceased. In 2024, those numbers dropped to 1, 3, and 1. This data highlights the challenges firms face in keeping new hires for a one year,” he said.
Key Adviser Movements Last Week:
- Net change of advisers (-2)
- Current number of advisers at 15,507
- Net Change Calendar 2024 YTD (-114)
- Net Change Financial YTD +166
- 24 Licensee Owners had net gains of 39 advisers*
- 28 Licensee Owners had net losses for (-66) advisers*
- 3 new licensees commenced and (-1) ceased
- 10 New entrants
- Number of advisers active this week, appointed / resigned: 108.
*The difference between the net gains of 39 advisers and the losses of 66 is (-27). However, many losses include advisers who were authorised with multiple licensees and did not fully cease on the ASIC FAR. Therefore, the actual net loss of advisers is only (-2).
Growth Last Week – Licensee Owners
- A new licensee commenced with 4 advisers. Two of the advisers were previously with United Global Capital and the other two coming back onto the FAR after a break.
- Finchley & Kent continue to transition advisers from Havana Financial owned by O & Z Pty Ltd and up by net three this week
- Four licensee owners up by net two including:
- Fortnum with three new entrants and losing one adviser
- Financial Advice Co with one new entrant and one adviser coming back after a break
- Elston Group with two new entrants
- ABC Financial Planning with both advisers coming back after a break.
- 24 licensee owners up by net one including Centrepoint, Shartru and UniSuper.
Losses Last Week – Licensee Owners
- Sambe Investments down by (-23). However, all the advisers had previously transitioned to Finchley & Kent
- O & Z Pty Ltd, (Havana). Down by 7. However, as is the case with Sambe Investments, all the advisers had transitioned to Finchley & Kent
- AMP Group down by four, losing five advisers and gaining one
- Seven licensee owners down by net two including, CBA, Infocus and Rhombus
- Eighteen licensee owners down by net one including, Fiducian, Ord Minnett and Sequoia.
I suspect many new entrants are shocked at how little of a financial planner’s time is spent actually helping clients, and how much of it is spent dealing with the hot mess of bad regulation.
Don’t forget their ASIC levy & CSLR levy!
I’m really surprised the number is as low as 10%. I’d be curious if there is a 3 year figure because I suspect that would be well over 50%. Its a crap job thanks to the incompetent legislation that is in place.
Fred your probably right, I think though it takes time for these new entrants to discover how badly FP are treated by press, APRA, ASIC, CSLR etc, and look at other opportunities and professions and think why bother.
I was asked last week by a PDM whether any of my adult children considered coming into FP? after I got back off the floor from laughing so hard I said No.
Ha ha how correct and funny Who would want to get into this mess
Once new advisers discover Annual Fee Renewal Consent Forms, red tape that simply doesn’t exist in any other market on earth, they shake their heads in disbelief & get a job (instantly) elsewhere. They realise no other industry is regulated to death like this one & leave to retain their sanity.
This is exactly as the government want things; their plan is going perfectly. Give it a decade and there will be “qualified advisers” and no one else.
And I suspect we’ll see that qualified advisers won’t have to pay all the extra taxes the Liberal and Labor government has imposed on small businesses.
I have actively discouraged 2 people in the last month to get into FP, too much admin & compliance versus spending time with clients doing work that adds value
Any adviser who previously worked at UGC should be investigated. One adviser initially got banned, and then had it overturned which shows ASIC are spineless when dishing out penalties
I would never encourage my children to pursue a career in advice in this country.
We get such little respect from the public and within the financial industry for the generally great work, wide array of technical and personal skills we have to have, and the typically great outcomes we deliver for our clients. There is misconduct and unethical operators in every industry and profession, yet is the humble advisers that are the punching bags for all.
Our reputations are constantly being tarnished by the reckless management decisions and actions of incompetent and psychopathic middle and upper management of the major participants in the market that do not understand advice and have no moral or ethical compass.
They then use the poor advisers as scapegoats for their actions and reckless decisions. Why would any rational person ever encourage anyone else to do this?