The financial advice industry in Australia is undergoing significant changes, and one group of advisers is being particularly affected. Limited advice advisers, who mainly focus on small areas of financial assistance, such as self-managed super funds (SMSFs), are leaving the industry at such a rapid pace that experts say this part of the sector could soon be “dead in the water.”
A Steady Loss of Advisers
For the week ending July 3, 2025, 190 advisers left the industry. This brought the total number of losses in June to 350 advisers. That may not sound huge, but the worrying part is where those losses are coming from. Over a third of them, 71 advisers, were from the limited advice sector.
So far in 2025, 132 limited advice advisers have walked away. That accounts for almost three-quarters of all the advisers lost this year. If this trend continues, the limited advice market could be reduced to just a handful of professionals by the end of the year.
The Hardest Hit Licensees
Some of the biggest blows came to NTAA’s SMSF Advisers Network, which lost 59 advisers in a single week. Count, another well-known licensee, lost 19 advisers, with 10 of them leaving its subsidiary, Merit Wealth, which mostly handles SMSF advice.
This is not just about individuals stepping away. Many entire licensees are closing down, and unlike in the traditional financial advice sector, no new ones are emerging to take their place.
Why the Decline?
Colin Williams, founder of Wealth Data, explained that this downturn has been years in the making. Back in December 2018, the limited advice sector was booming. Many advisers started their own Australian Financial Services Licences (AFSLs) or joined groups like the SMSF Advisers Network.
But things soon became harder. The introduction of the FASEA exam made it more challenging for advisers to qualify, and ongoing education and compliance requirements added additional stress. Over time, many found it too difficult to keep up.
“The sector has already been losing advisers for several years,” Williams said. “Now, with only low numbers remaining, it could be considered dead in the water.”
Research Supports the Trend
Data from Adviser Ratings backs up this trend. Their quarterly Musical Chairs Report found that the number of licensees offering limited advice fell to 97 in 2025, down from 113 just three years earlier.
What’s more, most of these licensees are tiny operations. Sixty-eight of them have only one adviser, while another 28 have just two to five advisers. This indicates that they are operating on a much smaller scale compared to full-service financial advice firms.
During the first quarter of 2025 alone, 86 per cent of the licensees that shut down were either small or limited licensees. This shows that the problem is concentrated in the limited advice sector rather than across the entire financial advice market.
What This Means for the Future
The shrinking pool of limited advice advisers has real consequences. For clients who rely on specialist SMSF advice or small-scale financial guidance, finding help may become harder and more expensive. Larger firms may step in, but they often focus on full financial planning, which could be more costly and less accessible to everyday Australians.
For the advisers themselves, the writing seems to be on the wall. With declining numbers, stricter regulations, and growing compliance burdens, fewer people are willing to stay in or join this part of the industry.
Unless something changes, like new support from regulators or a shift in the business model, limited advice may soon become a thing of the past in Australia.
Conclusion
The decline of limited advice advisers shows how quickly an industry can change when regulations, compliance, and economic pressures pile up. What was once a growing sector in 2018 is now collapsing, with experts warning it may not survive. For clients and advisers alike, this could mark the end of an era in financial advice.
