Large advice licensees increasingly less influential
The influence of large licensees on Australian financial planning has significantly reduced over the past two years with small to mid-size businesses having emerged as a more dominant force, according to the latest analysis from WealthData.
The analysis reveals that not only have the banks exited the financial advice arena but even the remaining large licensees have been shedding advisers with the result that firms with fewer than 20 advisers now make up a quarter of the advice profession, while those with fewer than 100 advisers represent nearly half the profession.
This represents a dramatic change from the situation at the start of 2021 when, notwithstanding the exit of the banks, large licensees remained the dominant players, accounting for over half of the advisers employed.
WealthData principal, Colin Williams said the data excluded those covered by accountants limited licensing arrangements.
What is particularly interesting about the data is that it shows that the number of advisers working under licenses with fewer than 20 advisers increased by 8% with much of that growth being at the smaller end of the spectrum.
The confirmation of the changing face of the profession came as the latest analysis of the Financial Adviser Register revealed the loss of only 10 advisers over the Christmas/New Year period, a substantial improvement over the same period last year.
However, this needed to be seen against the background of 19 provisional advisers being appointed, with Williams also noting that the Christmas/New Year period had traditionally generated a significant number of adviser resignation.
The latest data shows that there are currently 15,855 advisers on the Financial Adviser Register.
Key Adviser Movements This Period – Cover Christmas and New Year:
Net Change of advisers (-10) this period
Net Change of plus 22 for the start of the new year
31 Licensee Owners had net gains for 47 advisers
35 Licensee Owners had net losses for (-57) advisers
4 new licensees and (-4) ceased
19 Provisional Advisers (PAs) commenced with 14 commencing in 2023
Summary
A much better start to the year to what we faced in Jan 2022 which was smashed by the then FASEA Exam requirements. Encouraging to see the ongoing hiring of Provisional Advisers into the new year.
Growth
Three licensee owners had net growth of 4. FSSSP (Aware Super) and APT Wealth both up 4 and in both cases, all were PAs. Bluewater also up 4 picking up advisers from MCA Financial Planners.
DFS No 1 (My Fortress) up by net 3, all are PAs. Arisia (Clover Financial) up by net 3, all moving across from Australian Investment and Insurance Group. WT Financial Group up by 2 with both advisers joining Synchron. A new licensee commenced with 2 advisers and Kilara Financial also up by 2.
A tail of 23 licensee owners up by net 1 which included Fortnum, Fiducian and ASVW and the remaining three new licensees.
Losses This Week
MCA Financial Planners have now all but disbanded after losing (-7) advisers and only have one remaining. AMP down net (-5). 4 Licensee owners down by (-3) including Industry Super Holdings and and Sequoia. Four licensee owners down by (-2) including Fitzpatricks and Capstone. A tail of 25 licensee owners down by (-1) including Highfield Group, Picture Wealth and Stanford Brown.
Of interest, one of the closed licensees (down to zero advisers) included Clearview with the advisers merged into other licenses owned by Centrepoint over the last year.
2023 – Interesting Numbers
Looking at the numbers it was very much a game of two halves (apologies for the sporting cliches). In the first half, we lost a net (-976) advisers, opened up 74 new licensees and saw 299 closed. In the second half, we lost (-360) advisers, opened 80 new licensees and only 55 closed.
As highlighted many times, the licensees closing were dominated by Accounting – Limited Advice peer group, i.e. operating on a restricted AFSL. They claimed 201 of the 348 closed licensees and only opened 1 new one. In contrast, the Financial Planning business model opened 126 and 82 closed.
Large advice licensees increasingly less influentialBy Mike Taylor13 January 2023
Mike, do not think the picture caption representing the financial Planning industry in your article is adding any support to the “confirmation of the changing face of the profession”