This equates to a 6.4 per cent decline in total adviser numbers for the quarter and is in line with the continuing fragmentation of the industry.

In December 2018, there was a large spike of new advisers due to new and returning adviser registrations prior to FASEA obligations coming into effect.

Advisers had to be authorised under an AFSL by the end of December in order to be recognised as an existing adviser.

However, the first six months of the year have seen 2,825 advisers cease operation, while there have been only 19 new entrants.

“We would expect this trend to continue, particularly in the short term prior to larger numbers of new entrants, but also in the medium term,” the report said.

“We anticipate a higher than average number of ceased advisers over the next few years as more and more advisers ‘bite the bullet’ and call time on their advising careers leading up to 2024.”

This was due to 2024 being the deadline date for all licensed advisers needing to have achieved a bachelor’s degree or equivalent due to the FASEA regulations.

Independent advisers were up slightly to 55.4 per cent of total advisers while aligned advisers are down by 0.5 of a percentage point to represent 44.6 per cent.

This was due to 69 per cent of shifting advisers moving into privately held licensees while only 15.5 per cent were shifting to aligned and even less into institutions.

The largest cohort of independent advisers (26.7 per cent) were part of licensees with 30 or more advisers, while 19.4 per cent belonged to licensees with 10 or fewer members.

For the first time ever, discontinued licensees had overtaken new entities, which the report said was a result of the FASEA regulatory regime.

“We expect new adviser authorisations to slowly increase in the next 12 months as more advisers start sitting the newly set FASEA exam, along with more new advisers fulfilling the professional year obligation,” the report said.