Adviser numbers declined by 38% in the last three years, from 26,500 in 2019 to 16,671 this year, according to a report from financial services industry researcher Rainmaker Information.

In the three years since the 2019 peak, the number of registered advisers dropped by 4200, 2950 and 2710, for an aggregate fall of 9860.

The decline in numbers came after the Australian Securities and Investments Commission (ASIC) requirement for advisers to register on the Financial Adviser Register (FAR) by January 1 2019.

Before the ASIC requirement, adviser numbers increased by 8500 between 2015 and 2019.

“The number of registered financial advisers is now back to where it was even before the adviser registration system was introduced,” Executive Director of Research Alex Dunnin said.

“All projections for adviser numbers point to no recovery without profound structural industry policy change.”

The researcher says the country will run out of financial advisers within five years if the current rate of decline continues.

But Rainmaker is postulating a more optimistic outlook, based on three other scenarios it has outlined.

One of the three scenarios relates to the long-term forward projection that in 20 years’ time there will be about 12,000 financial advisers if the “boom then bust” trend in the 2015-2022 pattern is ignored.

Another scenario assumes that if the number of registered financial advisers falls only by 5% per annum, there will only be 6000 advisers by 2042.

“While these are predictions at this stage, they serve a purpose,” Mr Dunnin said.

“They reinforce that the current trend of advice industry exits is so baked-in that it is naive to expect a recovery in financial adviser numbers anytime soon.”