Australia has experienced an overall decline of almost 700 advisers around the country in Q3 2019, a contraction of almost 3%, according to a report.
Having analysed data from the Australian Securities and Investments Commission and industry participants, research house Adviser Ratings found the industry lost 700 practitioners across the quarter, leaving a total size of 24,772 registered financial advisers.
The report also showed that a significant number of advisers who ceased activities in Q2 re-entered the industry after switching licensees. While there were 949 ceased advisers in Q3, 241 advisers who were ceased prior returned to being licensed in Q3.
We can see for the first time this year, each month of Q3 saw more advisers switching into new licensees than there are ceasing"
"We can see for the first time this year, each month of Q3 saw more advisers switching into new licensees than there are ceasing," the report reads.
"This illuminates a ‘returning dynamic' that we have not seen before and demonstrates that a large surge in ceased advisers does not necessarily equate to an acceleration of advisers leaving the industry."
There was also a 70% increase in financial advisers switching licensees in the third quarter of 2019 compared with the previous quarter. A total of 1218 financial advisers moved to a new Australian Financial Services Licence holder or "dealer group" over the quarter, of which 842 or 70 per cent were previously with institutional or aligned licensees, such as those owned by the big four banks, AMP and IOOF.
The decline in adviser numbers and the increase in advisers switching licensees can be pinned on several institutions exiting the industry, including Westpac and its aligned networks Magnitude and Securitor.
Just Westpac saw a total of 456 financial advisers leave its Magnitude, Securitor and Westpac Financial Planning subsidiaries respectively. AMP Financial Planning saw a total of 70 advisers leave the business, offset by the 26 advisers who were onboarded over the quarter.