This comes at a time when demand for retirement planning is rising sharply. A deadline set by the corporate regulator could cause an additional 1000 advisers to exit next year if they do not meet updated qualification standards. The talent shortage is already pronounced and may worsen further. While artificial intelligence is being explored to improve efficiency, doubts remain over its capacity to manage complex financial decisions safely, especially those concerning retirees.
Licensed financial advisers have dropped by 47% since 2019, largely due to stricter regulations, more demanding qualification requirements and increasing operational costs. At the same time, Australia’s population is ageing, with millions of Baby Boomers preparing for retirement. As a result, the cost of financial advice has surged. The average annual fee now stands at $4700, after an 18% rise over the past year.
In response to growing pressure, the industry is looking to innovation and alternative workforce strategies. Large financial firms believe that AI could help advisers double their client load, from about 120 to as many as 240, by automating basic tasks. However, anxiety persists around potential misuse of AI. Industry leaders warn that even though AI can improve efficiency, it may not yet be capable of handling the complexities of retirement advice without risking errors or spreading inaccurate information.
To increase the talent pool, the government has introduced the Delivering Better Financial Outcomes program, proposing a new group of entry-level advisers. These cadet-style roles would be trained to address simpler issues, such as superannuation contributions and basic insurance queries. The training time would be significantly shorter than the current four-year qualification process, potentially adding new advisers within a year. Industry bodies are optimistic about this approach, seeing it as a way to quickly address the growing gap in adviser numbers.
Still, caution remains. Some leaders in the financial advice industry warn that depending too much on junior staff may lead to risks if their duties are not clearly defined. While these new roles could handle straightforward enquiries and ease some workload, there is concern they may unintentionally provide advice beyond their expertise, especially in areas like retirement planning. Ensuring high-quality guidance during critical financial stages remains a key priority as the industry balances workforce growth with responsibility.
