A quarter of advisers plan to exit industry
One in four advisers expect to leave the industry within the next five years as the cost of providing advice continues to rise, according to a new report.
Research firm Investment Trends has released its Adviser Business Model Report for 2022 this week, an in-depth study of Australian financial advisers and their business support needs.
One of the key findings from the report was that around one in four advisers intend to leave the industry within the next five years.
The research firm noted that ever-changing regulatory landscape has seen the population of advisers drop from around 20,000 in 2021 to 16,500 in 2022.
As previously stated in its 2022 Adviser Technology Needs Report, Investments Trends said compliance burden, providing affordable advice and regulatory changes remain the key challenges for advisers.
“The research revealed that the complexity of these impacts and the ongoing structural changes in the sector has considerably driven up the cost of providing advice,” Investment Trends said.
“The total cost of providing full advice to the typical client (breakeven point) has increased from $2,850 in 2020 to $3,280 in 2022.”
Investment Trends research director Dougal Guild said while the move to self-licensing has eased over the past year with advisers weighing up the benefit of of additional costs and compliance charges associated with this model, there is expected to be continued movement of advisers.
“[Around] 70 per cent are looking to leave their licensee in the next 12 months intend to move to a self-licensed model,” said Mr Guild.