Australia's financial adviser landscape is at a crossroads. The number of financial advisers has stabilised at around 16,000 and is projected to climb, but this may not be enough to avert a supply shortfall.
Following a 43% decline in financial advisers since December 2018 and a projected 17% increase in the number of pre and post-retirees (individuals aged 55 to 84 years) over the next decade, there is a mismatch that may leave many missing out on crucial financial advice.
Research from Rainmaker Information’s Financial Adviser Report suggests that there maybe a silver lining, indicating that the number of advisers may be bottoming out, as both the quarterly and rolling 12-month changes in adviser numbers are converging toward zero.
Despite these signs of stability, Rainmaker Information’s projections anticipate that adviser numbers will remain within the range of 15,000 to 18,000 by the end of the next decade.
"These projections affirm our view of the Quality of Advice Review's anticipated positive impact on the industry,” said Alex Dunnin, executive director of research and compliance at Rainmaker Information.
“However, it is important to note that even at the upper end of this range, adviser numbers may barely keep pace with expected consumer demand."
In stark contrast to the decline in adviser numbers, the number of Australian Financial Services Licenses (AFSLs) has fallen at only half this rate, dropping by 18%.
This data underlines a concerning disconnect between the licensing of advisers and the number of practitioners in the field.
"If these adviser numbers fall toward the lower end of the range, we risk facing a severe per-capita shortage of advisers available to serve the needs of pre and post-retirees.”
“The industry faces a critical challenge to ensure that the growing demand for financial advice is met adequately."
“Australia's financial advice industry must remain agile and proactive in finding innovative solutions to bridge the adviser shortfall, ensuring that financial advice remains accessible and reliable for all Australians,” said Dunnin.
About us:
About Rainmaker Information
Rainmaker Information, founded in 1992, is a leading Australian-based financial services information publishing house providing marketing intelligence, research, and consulting services on the wealth management industry.
Rainmaker gathers and generates in-depth marketing intelligence with industry research, data, professional development and media capabilities. These resources can be accessed with a subscription to the RainmakerLive terminal.
Rainmaker Information is owned by Institutional Shareholder Services (ISS) and is part of its ISS Market Intelligence business.
About ISS Market Intelligence
ISS Market Intelligence (MI) is a leading global provider of data, analytics, insights, media, and events solutions to the global financial services industry.
ISS MI empowers global asset and wealth management firms, insurance companies, distributors, service providers, and technology firms by providing cutting-edge market-engagement platforms and the actionable intelligence necessary to fully assess their target markets, identify and analyze the best opportunities within those markets, and execute on comprehensive go-to-market initiatives to grow their business.
ISS MI clients benefit from our increasingly connected global ecosystem that leverages a combination of proprietary data, powerful software and analytics, timely and relevant insights, in-depth research, as well as an extensive suite of industry leading media brands that deliver unmatched market connectivity through news and editorial content, events, training, ratings, and awards.
Contact details:
Julian Clarkstone
P. 02 8234 7514
E. julian.clarkstone@rainmaker.com.au
