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Adviser Numbers to Halve - but will anyone notice?

Goodreturns has a piece on the likely number of advisers halving as a result of the proposed law change. That prompts several questions. 

From what? The number of RFAs is genuinely hard to work out. The register is a mess 17,000 plus entries and rising. Because it is so simple (and relatively inexpensive) to register, lots of people do it. Most of these entries do not represent a person that gives advice. As quotemonster provides a useful free service to most RFAs that sell insurance we have a lot registered, but we have spent a lot of time weeding out 'dead' accounts, and we continue to see plenty of new registrations. Few will become successful advisers. 

Do they all give advice? A significant number of people register as advisers and yet do not give advice. If you run a business which is, in fact, sales-only, there was still an advantage to register, as it reduced the risk and consequences should the person accidentally give advice. If RFA numbers fall that does not immediately mean that the number of advisers - meaning people actually giving advice - will fall. 

How productive are they? It seems clear to us that most life insurance business is handled by the top 2,000 advisers, of which some 200 or so are AFAs. I expect the pattern to be little different for general insurance and home loans. A fall in the number of advisers does not equate to a fall in advice being given. 

To what? Although the category 'RFA' will disappear, the people no longer in that category may appear in others. They may become FAs, or FARs, or they may sell but not give advice, as well as leaving the industry. 

Of course, I am concerned that the new regime will result in a reduction in the number of advisers, and share that with Michael Dowling. The interesting thing about the likely reduction in RFAs participating will be the answers to the questions above. But the presence of the questions also tells us something about the current regime. 


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