Australia | Nov 13 2019
Download related file: Musical-Chairs-2019-Q3-2-
The flood of financial advisers leaving the industry post Royal Commission continued in the September quarter, and a growing number of those remaining are eschewing institutional association.
The recent trend of financial advisers leaving the industry continued in the September quarter, as noted in Adviser Ratings’ (ARdata) quarterly “Musical Chairs” report (attached).
The fallout from the banking Royal Commission impacted on financial advisers, including stricter regulation, changed fee structures and increased qualification requirements. Notwithstanding the simple “brand damage” that befell major institutional wealth managers by whom advisers were employed or with which they were aligned.
Analysts assumed at the time that for many an older adviser, all of the above would provide incentive to call time. For younger or prospective advisers, the hurdles were raised.
Adviser ratings reports a net -700 advisers left the industry in the September quarter, taking the number of those authorised to provide financial advice down to 24,772 from 25,470 at the end of the June quarter – a fall of almost -3%.
There has also been a continued drop in the the number of institutionally “owned or aligned” advisers compared to private licensees. At quarter-end, 42% of all advisers remain owned or aligned while 58% are private.
Over the period, the number of “owned” advisers fell to 13.8% from 14.5% in June, the number of “aligned” advisers fell to 28.4% from 30.1%, and number of private advisers rose to 57.9% from 55.4%.
Adviser Ratings provides a further analysis of the adviser industry and addresses the reasons behind these trends more extensively in the attached report.
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