Australia still faces a shortage of financial advisers even as recent declines in numbers appear to have plateaued, Rainmaker Information says in a new report. 

The financial services researcher projects adviser numbers to rise but the increase may not be enough to avert a “massive” supply shortfall as more Australians enter the pre- and post-retirement phases of their lives. 

The number of pre- and post-retirees aged 55-84 over the same period is expected to increase 17% over the next decade. 

Rainmaker says the number of financial advisers has stabilised at around 16,000 following a 43% decline since December 2018, and will remain within the range of 15,000 to 18,000 by the end of the next decade. 

“However, it is important to note that even at the upper end of this range, adviser numbers may barely keep pace with expected consumer demand,” Executive Director of Research and Compliance Alex Dunnin said. 

“The industry faces a critical challenge to ensure that the growing demand for financial advice is met adequately.” 

He says the financial advice industry must remain agile and proactive in finding innovative solutions to bridge the adviser shortfall, ensuring that financial advice remains accessible and reliable for all Australians. 

Proposed reforms made by the Quality of Advice Review (QAR), which the Federal Government has announced it will implement in stages, will have a “positive impact” on the advice profession, Mr Dunnin said. 

Treasury has commenced consultation on draft legislation to implement the first phase of advice reforms but reactions from industry stakeholders have been mixed. 

The legislative amendments seek to streamline ongoing fee renewal and consent requirements and remove the obligation to provide a fee disclosure statement.  

But the Federal Government has left out, for now, proposed QAR reforms in relation to statement of advice and removal of safe harbour steps from the best interests duty. 

“These are important elements in cutting unnecessary red tape and have the potential to meaningfully reduce the cost of providing advice,” Financial Advice Association Australia (FAAA) CEO Sarah Abood said.