Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Adviser numbers begin long, slow climb north again
It’s going to take a long time to bring adviser numbers back to the 29,000 we saw in 2018, but the new financial year has at least begun with a steady replacement of those lost to financial advice leading up to June 30.
The industry experienced a net increase of 13 financial advisers this week according to research from Wealthdata, contributing to a total of 147 new advisers (net) in the new financial year. Those numbers were buoyed by consecutive weeks where 18 new entrants came onto the ASIC’s Financial Advice Register.
Adviser numbers typically take a dive leading up to the end of the financial year as advisers come off the registry at one employer (thus avoiding the adviser levy) and join the registry under another license. Accordingly, while there have been 147 new entrants in the first 3 weeks of the new financial year, this number has to be matched up against the 205 that left the industry in the final 3 weeks leading up to June 30.
So more advisers went out in the 3 weeks leading up to the end of financial year than came on in the same span after July 1. The slower return of advisers to ASIC’s registry is not uncommon, however, according to Wealthdata managing director Colin Williams, who notes that some advisers take time off before they re-enter the pool, and the surge in movement generally equalises on the back end – it just takes slightly longer.
There are now 15,493 financial advisers registered in Australia.
The activity in adviser numbers was pale in comparison to the movement in licensees this week, with Insignia’s wealth retreat causing the greatest ruction. After selling Godfrey Pembroke last year (to advisers, who then branded it as Practice Development Group) and then selling Millenium3 to WT Financial Group, Insignia most recently directed its self employed licensees into a new entity, Rhombus Advisory, which it owns 37 per cent of.
Rhombus has two large licensees, RI Advice (210 advisers) and Consultum (279 advisers), the latter of which also houses advisers formerly under the Consultum license.
The end result is that Insignia, which overtook AMP as the largest advice business in the country when it bought the MLC network, is now out of the top ten largest licensees. After fielding around 1,600 hundred advisers across 531 firms during formers CEO Renato Mota’s expansionary era, Insignia now has 229 advisers in its remaining Shadforths (119 advisers), Bridges (97 advisers) and Actuate Alliance Services (13 advisers) businesses.
AMP is again the largest advice provider in the country by adviser numbers at 832, with Count Limited’s own expansionary period taking it to 682 advisers. Centrepoint (552), WT Financial Group (529) and Rhombus Advisory (489) round out the top five.
