The Disappearance Of Financial Advisers In Oz

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A vanishing breed: The disappearance of Australia’s financial advisers

-Number of financial advisers in decline
-Trend contrasts with increased need for financial advice
-New rules have made life much harder for financial advisers
-Market is seeking solution through multiple alternatives
-Industry stakeholders are calling for regulatory reform

By Lily Brown

For years, financial advisers have been trusted guides, helping Australians manage their money, invest wisely, and plan for the future. But now, they are disappearing.

In 2019, there were more than 28,000 registered advisers across the country; by 2025, this number stands at less than 16,000. This isn’t because people no longer need financial advice; quite the opposite.

The problem, according to Julien Meinrath, a former financial planning veteran turned financial coach, was a convergence of three main factors:

-ongoing legislative changes,

-the fallout from the Royal Commission (more details on that later),

-and the demographics of the adviser population itself.

By the time the Royal Commission hit, many advisers were in their mid-50s and nearing retirement. Faced with the need to make significant changes such as getting a master’s degree (a new requirement following the Royal Commission) late in their career, “many simply chose to exit rather than reinvent themselves,” says Meinrath.

The inadvertent counter-effect of a regulatory squeeze

Financial advice has always been regulated, but after the Royal Commission into banking and financial services, the government cracked down hard.

Investigations revealed some advisers were charging fees without providing services, giving bad advice, and steering clients toward investments that benefited the advisers more than the investors.

The response was a wave of new regulations designed to protect consumers, but these rules have also made life much harder for financial advisers.

Some key changes include:

-Higher barriers to entry: Financial advisers must now pass an exam administered by the Australian Securities & Investments Commission (ASIC) and meet stricter educational requirements. According to Meinrath, “The qualification requirements jumped dramatically. Suddenly, there was talk of advisers needing to have a master’s degree. For people nearing retirement who’d never studied formally, it just wasn’t worth the economic cost.”

-Fee-for-service model: Moving away from commissions, advisers must obtain explicit client consent annually for ongoing fees. However, Meinrath observed, to get around the sticker shock for clients, a lot of businesses simply rebranded the fees. “What used to be a 1% commission became an establishment fee’. Same amount, just a different name,” he explains.

-Increased compliance costs: More audits, enforcement actions, and rising professional indemnity insurance costs. Meinrath confirms, “There’s no question, the cost to comply has become enormous. Throughout my 15 years as an adviser, that burden only grew.”

-Dismantling of large dealer groups: Major banks exited wealth management, forcing advisers to either become independent requiring costly new licenses or leave the profession altogether. Meinrath, who worked at Westpac, recalls, “The banks owned the whole vertical. Westpac had BT Funds Management, Commbank had Colonial. When the Royal Commission happened, they tried to unwind those positions.”

While these changes were meant to fix the industry, they have made it much harder for advisers to do their jobs. Many experienced professionals have chosen to leave rather than deal with the added stress and expense.

“While regulation is essential in a sector like financial advice, successive governments have imposed complex and often duplicative obligations that drive up costs without delivering meaningful improvements in consumer protection,” says Daniel Gara, a 25-year veteran of the advice sector, co-founder of AdviserLogic and financial technology leader. “A rationalisation of the regulatory framework could reinvigorate the sector.”

An evolving investor landscape: navigating advice gaps and new alternatives

The exodus of financial advisers raises concerns about whether Australian investors are being forced to fend for themselves. Without professional guidance, retail investors face greater risks of misallocating capital, falling prey to market volatility, or making uninformed decisions about their portfolios.

These risks are partially mitigated by two complementary trends: managed accounts and algorithmic advice.

Managed accounts

Platforms like Netwealth Group ((NWL)) and Hub24 ((HUB)) let advisers hand over daily investment decisions to professional managers while still maintaining client relationships. Ironically, the adviser shortage has created opportunities for these platforms, with assets growing (2635% from 2023 to 2024) across these platforms.

This is driven by the fact that even though the total number of advisers is shrinking, the remaining advisers are managing larger client books and consolidating operations. To serve more clients efficiently, they’re turning to technology-driven platforms to streamline administration and portfolio management.

And since many bank-aligned dealer groups have exited the market, independent advisers now need more flexible, tech-driven platforms like Netwealth, Hub24 and others.

Algorithmic advice

For people who prefer a do-it-yourself approach, robo-advisers offer a low-cost alternative. These digital platforms use algorithms to create and manage investment portfolios based on an investor’s goals and risk level.

Companies like Stockspot and InvestSMART, as well as digital services from big financial firms, have gained popularity, especially among younger investors looking for an easy, hands-off way to grow their money.

The integration challenge

Despite their convenience, digital platforms come with serious challenges. Companies like Netwealth and Hub24 face risks that could slow their growth.

If adviser numbers keep shrinking, fewer professionals will be left to use these platforms, cutting into their customer base. Meanwhile, a new generation of investors comfortable making decisions on their own may not see the need for platforms that act as middlemen.

Regulation is another wild card. Governments could introduce stricter rules on cost transparency or even cap fees, forcing platforms to lower their prices and tighten their margins.

“Although robo-advice has so far remained limited in scope, the fintech sector’s ability to integrate AI into advice processes suggests that advisers of the near future may become bionic, combining human insight with technological augmentation to engage more clients and help close the advice gap for Australians,” Gara explains.

Meinrath is also cautious: “For very limited solutions, robo-advice works well, like for purchasing insurance or setting up SMSFs. But for holistic advice, there’s no replacement for the human touch. Everyone’s situation is unique. Robo-advice hasn’t solved that yet.”

PFMs, finfluencers, and financial coaching

Beyond managed accounts and robo-advisers, a new ecosystem of tools and voices has emerged to guide everyday Australians in response to the advice gap.

Personal Financial Management (PFM) tools like Pocketbook, MoneyBrilliant, and MoneySoft have gained traction among self-directed investors. These apps aggregate users’ banking data, helping them track spending, set budgets, and manage cash flow across multiple accounts. “Many PFMs followed a similar path; there’s been real growth here, especially among tech-savvy users who want to better manage their money without paying for traditional advice.”

At the same time, finfluencers’ social media personalities focused on financial education have stepped into the breach. Through platforms like Instagram, TikTok, and YouTube, they offer digestible content on saving, investing, and wealth-building strategies. But they tread a fine legal line: “As soon as they recommend a specific product, they fall under ASIC regulations for providing advice,” Meinrath warns. Regulators have already fined some influencers for crossing that boundary.

Financial coaching, meanwhile, has emerged as a distinct discipline from traditional planning. “Coaching works hand-in-hand with planning, helping people change behaviours and build discipline. It’s very similar to health and fitness coaching. People know they should save and budget, but they need help with the implementation,” explains Meinrath.

Together, these alternatives are reshaping the way Australians engage with their finances, though none have fully replaced the holistic support offered by human financial advisers.

Can the industry be revived?

With financial literacy more crucial than ever, and digital solutions being limited, at least for now, industry stakeholders are calling for regulatory reforms to ensure the sustainability of the profession.

Recognising this, the government is trying to make it easier for new people to enter the field while still maintaining strong protections for consumers.

Some key efforts include:

-Streamlining qualification requirements: The government is changing education rules so that people with any bachelor’s degree combined with finance-specific course work can become advisers.

-Creation of a new class of financial advisers (NCA): Aimed at delivering simpler, quality advice, NCAs will complete an accredited qualification covering ethics, regulation, consumer behaviour, and advice processes.

-Consultation on fee consent forms: Efforts are underway to reduce unnecessary paperwork, making it easier for advisers to charge clients without excessive red tape.

Meinrath remains cautiously optimistic. “Financial planning has moved upmarket, focusing more on high-net-worth clients. Coaches, apps, and even finfluencers have tried to fill the gap for everyday Australians.”

What is clear is that Australia’s wealth management industry is undergoing a profound transformation. “The current advice landscape presents a clear opportunity for both legislators and innovators,” Gara notes.

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