The latest figures from the Australian Securities & Investments Commission (ASIC) show that the number of financial advisers in Australia is continuing to fall. Total adviser numbers have dropped from a peak of 28,914 in 2019 to 18,954 currently with forecasts of a decline to 15,000 by the end of 2021.
As there are only 142 ‘provisional’ financial advisers in the system, the shortage of qualified advisers is going to become even more acute.
|Adviser Numbers by Start Date in Industry|
According to modelling by professional services firm KPMG, the average cost to provide financial advice exceeds the price paid for that advice by around 30%. Preparing a comprehensive Statement of Advice takes around 23.9 hours and costs about $5,335 to produce.
Financial Services Council CEO Sally Loane said the modelling suggests the industry could save about $91 billion over the next 20 years if red tape reduction measures were adopted.
‘Current regulations prescribe compliance obligations at every step of the advice process,’ Ms Loane said. ‘They are an unprecedented driver of cost for financial advisers and consumers, and are past their use-by date.’
The report found that while leveraging technology may reduce the cost of advice, ‘there is no single advice technology solution which will unilaterally solve the advice challenge.’1
1 Vickovich, A., 2021. Financial advice a loss-making business: KPMG, Australian Financial Review, 12 October