There were 19,382 financial advisers operating in Australia as at 30 June 2021, the first financial year since 2015 that ended with numbers falling below 20,000.
Almost 9,000 advisers have exited the industry since 2018, approximately a 30% decline, according to Rainmaker Information's latest Financial Adviser Report.
In the last year alone the number of Australian Financial Services Licensees (AFSLs) fell from 2,125 to 1,907, a 10% decline, of which advisers that are part of a bank-owned licensee fell 39.6% in the same period.
The larger AFSLs are seeing the biggest reduction in their adviser numbers. The number of advisers representing AFSLs with one or two advisers actually increased by 0.6% in the last calendar year and AFSLs with three to 10 advisers only decreased by 3.9%.
The RainmakerLive Adviser Movements Pipeline has found the follow movements to 31 August 2021.
"This adviser exodus has been associated with the massive disruption now befalling the financial advice sector," said Alex Dunnin, executive director of research and compliance at Rainmaker Information.
"The regulatory disruption that Australia's financial advice sector is facing is due in large part to the huge push by government, regulators and other stakeholders to improve the quality of financial advice."
With several new pieces of legislation being introduced from 2017 to 2020, this corresponded with the industry shifting from a gradual incline in the number of financial advisers into a rapid decline.
"We are yet to see the evidence, however, of how all these regulatory changes have improved the outcomes for those who seek financial advice," said Dunnin.
The key legislation introduced since 2017 includes:
Ord Minnett, Count Financial and Industry Fund Services achieved the largest net growth in their number of financial advisers in 2022.
Investors may make more money if they invest in managed investment products that are in net outflows.