626 financial advisers joined the industry in the quarter to 31 March 2023, according to research from the Rainmaker Information Financial Adviser Report.
“It is too early to determine if this upturn signifies a recovery or a temporary anomaly, but it provides a glimmer of hope for the industry,” said Alex Dunnin, executive director of research and compliance at Rainmaker Information.
Mirroring this positive trend, there was an increase of 213 licensees during the March 2023 quarter.
The majority of this growth stemmed from small non-aligned Australian Financial Services Licensees (AFSLs), however AMP Financial Planning, Fortnum, Industry Fund Services, Bridges, and Interprac attracted the highest number of financial advisers to their licenses.
“AFSLs aligned with super funds experienced the sharpest increase in adviser numbers, reinforcing the significance of this sector in the industry's recovery,” said Dunnin.
Despite the quarterly growth, overall numbers are down on an annual basis.
The number of ASIC-registered financial advisers decreased by 8.2% (a net loss of 1,447) in the 12 months leading up to March 2023, reaching a total of 16,155.
There was also a significant reduction in the number of advice licenses, which fell by 13% or 266 over the 12-month period to reach 1,824.
Over the entire 12-month period, 1,876 advisers joined an AFSL, while 3,034 advisers ceased their association with one.
Approximately 64% of financial advisers are classified as non-aligned, indicating their independence from larger financial institutions, with 36% of advisers are associated with aligned AFSLs.
The report revealed a decline of 12% in the number of aligned financial advisers during the 12-month period, while non-aligned advisers experienced a more modest decrease of 6%.
AMP Financial Planning emerged as the largest financial advice licensee, boasting 508 verified financial advisers.
Morgans Financial followed closely with 426 advisers, while Charter, Interprac, and Consultum held 302, 301, and 297 advisers, respectively.
Insignia Group emerged as Australia's financial adviser power brand, with 1,326 financial advisers, while AMP secured second place with 989 advisers.
Together, these two organisations accounted for 14% of the market, representing a total of 2,315 financial advisers.
“While challenges persist, the encouraging increase in adviser numbers during the March 2023 quarter indicates a potential turnaround for the sector,” said Dunnin.
“Industry stakeholders are cautiously optimistic about the future and will closely monitor the market to assess whether this positive momentum can be sustained.”
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Superannuation fees have fallen 2% over the last financial year to reach to 0.93% per annum, the lowest total expense ratio on record.
Australia’s financial adviser numbers have stabilised at 16,000 and is projected to climb, but this may not be enough to avert a supply shortfall.
