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Accountants lead mass adviser exit as FY20 wraps up

More than 300 advisers left the industry in just one week leading up to the end of the 2019–20 financial year, with the exodus led by accountants and contributing to flat growth for most dealer groups.

Business Sarah Kendell 13 July 2020
— 1 minute read

According to data from Adviser Ratings, 354 advisers ceased operating in the seven days to 2 July, a number that excluded more than 70 authorised representatives who were mid-merger and likely to re-enter the industry once their respective groups had settled transactions.

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The data revealed that it was not just older, retiring advisers leading the exodus, with 48 per cent of those who left over the week having between zero and 10 years’ experience in the industry.

In a video presentation, Adviser Ratings founder Angus Woods said the numbers of advisers leaving was “significantly higher than previous weeks”, and that the industry was losing significant numbers of experienced practitioners.

“10 per cent of those advisers who left had 30-plus years’ experience, so more than 30 advisers who have been in the industry for some time,” Mr Woods said.

“On the other end of the scale, you can see 48 per cent of advisers had zero to 10 years’ [experience], but I would just caution on these numbers [that] a lot of these are accountants that are leaving the industry that previously were not required to put down years of experience under the limited AFSL option.

“So, these numbers are quite concerning in terms of the years of experience of those leavers.”

There were 40 advisers switching licensees as the financial year came to a close, while just three new advisers joined the industry, Mr Woods said.

While a number of groups added new advisers, including PIFA president Daniel Brammall’s licensee IFA Australia and Evans and Partners, the groups were still down on adviser numbers from December 2018, when the industry reached its peak.

In terms of losses, IOOF-owned Millennium3 lost 33 advisers over the week, which Mr Woods attributed to an ongoing compliance “clean-up” at the group, while Interprac lost 15 representatives and the accountant-dominated SMSF Adviser Network lost 14.

Accountants lead mass adviser exit as FY20 wraps up
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