Adviser Ratings’ 2020 Advice Landscape Report surveyed advisers on their intentions to stay in the industry beyond 2021, and found that around 770 advisers from the aligned dealer groups were expected to exit, while more than 670 from large privately owned licensees (of more than 100 advisers) were planning to leave.
The exodus from the industry was also widely felt across different segments of the market on a percentage basis, with 30 per cent of limited licence holders and 22 per cent of industry fund advisers expected to leave the sector by the end of 2021.
During 2020, the report revealed that adviser losses had primarily been felt across the bank and bank-aligned licensees, with around 620 bank financial planners ceasing their authorisations while 600 advisers from the aligned sector left their dealer group.
At the same time, privately owned licensees were able to pick up a significant percentage of those leaving the bank sector, with large privately owned licensees picking up 550 new advisers while mid-sized dealer groups (between 11 and 100 advisers) added around 530 new recruits.
Meanwhile, the sector was also rapidly decentralising, with boutique dealer groups of up to 10 advisers now making up 61 per cent of all licensees.
While most segments of the market had gone backwards since the royal commission, with licensee numbers declining from 2,282 in 2018 to 2,164 in 2020, boutique licensee numbers had grown by 4.5 per cent.
Around 520 advisers had also joined boutique licensees over the course of 2020, the report said.
Licensee numbers had continued to decline in 2020 overall, with 137 new licences established during the year while 208 were discontinued.
While AMP had shrunk significantly in size by more than 50 per cent in the past five years across its dealer groups, the wealth giant still remained a dominant force in advice, making up the second-biggest licensee in AMP Financial Planning with 811 advisers, and the fifth-biggest in Charter with 452 advisers as at December 2020.
The SMSF Advisers Network was now the largest dealer group in Australia with 830 authorised representatives, while Synchron claimed the number three spot with 515 advisers. Stockbroking group Morgans Financial came in at number four with 492 authorised representatives.
The report also predicted IOOF would eclipse AMP to become the largest advice group in Australia following its acquisition of MLC, at around 1,900 advisers to AMP’s approximately 1,200.
