The financial advice industry in Australia underwent a series of significant developments in 2024, marked by legislative reforms, mergers and acquisitions, executive shifts, and financial milestones. Throughout the year, several major announcements and events stood out, encapsulating a time of transformation and growth within the sector. At the start of the year, a noteworthy announcement about the Compensation Scheme of Last Resort (CSLR) levy, set at $241 million primarily due to complaints against Dixon Advisory, garnered attention. This levy aimed to support claims from consumers who had fallen victim to financial misconduct, emphasizing the industry’s ongoing commitment to accountability and consumer protection.
The Australian Securities and Investments Commission (ASIC) confirmed changes to the financial adviser exam in January, replacing short-answer questions with multiple-choice questions. This move was aimed at simplifying the examination process, reducing barriers for advisers, and fostering a more accessible path to certification. These changes highlighted a concerted effort to create a more inclusive and efficient certification process for financial advisers, reflecting an evolution in professional standards and industry practices.
Simplifying Certification and Leadership Changes
Leadership changes marked significant shifts within the industry, beginning in February when Insignia Financial appointed Scott Hartley as its new CEO following Renato Mota’s departure. Hartley, who previously served as the chief executive of wealth management at AMP Australia, officially took charge on March 1. This leadership transition reflected a broader trend of executive shifts within the sector as companies worked to navigate new challenges and opportunities. In the same month, Platinum Asset Management unveiled a turnaround strategy in response to net outflows and declining revenue. The appointment of Jeff Peters from Columbia Threadneedle as CEO signified a strategic shift focusing on resetting the business and enhancing product and distribution capabilities.
March brought a particularly eventful period with the completion of the merger between Count and Diverger on March 1, creating Australia’s second-largest advice licensee boasting over 500 advisers. This merger underscored the industry’s trend towards consolidation and scale, highlighting a collective effort to strengthen market presence and fortify business operations. Additionally, the government introduced a bill to Parliament to legislate the initial stream of the Quality of Advice Review (QAR) reforms. These reforms included recommendations for the payment of advice fees, improved advice access, and the removal of regulatory red tape. This legislative initiative marked a pivotal moment in the industry’s evolution towards more efficient regulatory practices and enhanced consumer protection.
Mergers, Acquisitions, and Legislative Reforms
April witnessed shareholder tensions at Sequoia Financial Group, leading to an extraordinary general meeting (EGM) in June. Despite calls for the removal of leadership positions, the existing leadership was ultimately preserved. This tension highlighted underlying challenges in corporate governance and shareholder relations. In May, Treasurer Jim Chalmers presented the 2024–25 federal budget, which included cost-of-living relief measures, superannuation on paid parental leave, and funding for sustainable finance markets. However, the financial advice industry saw no substantial wins, despite a continued focus on Delivering Better Financial Outcomes (DBFO) legislation.
In June, another significant merger and acquisition (M&A) deal took place when Infocus Wealth Management acquired Madison Financial Group from Clime Investment Management, increasing its adviser numbers to over 200. This acquisition reflected the ongoing trend of strategic consolidation within the industry. July marked a legislative milestone with the passage of the first DBFO bill, which aimed to streamline fee documentation and enhance the flexibility of financial services guides. These regulatory adjustments reflected the industry’s commitment to creating a more streamlined and efficient regulatory environment.
Strategic Acquisitions and Legislative Milestones
August saw one of the year’s most significant announcements when AMP sold its advice licensees and self-licensed offering Jigsaw for $10.2 million to Entireti and handed over minority stakes in 16 practices to AZ NGA for $82.2 million. This exit from financial advice after 175 years marked the end of an era for AMP and represented a substantial shift in the industry’s landscape. This transition illustrated the evolving dynamics and strategic reorientations taking place within the sector. In September, the Federal Court approved a $100 million settlement for AMP class action members, addressing grievances over the settlement sum. This resolution provided a sense of closure and highlighted ongoing efforts to address past controversies.
During the same month, an inquiry was announced to investigate the collapse of Dixon Advisory and its implications for CSLR, led by the Senate economics references committee. This inquiry underscored the importance of understanding the factors contributing to financial failures and improving the mechanisms designed to protect consumers. AZ NGA also confirmed a $240 million strategic growth partnership with Oaktree Capital Management, finalized in December. This partnership illustrated the sector’s ongoing investment and expansion efforts and the sustained focus on strategic growth opportunities within the industry.
Investigations, Partnerships, and Declining Complaints
October brought positive news, as the Australian Financial Complaints Authority (AFCA) reported a notable decline in complaints about investment and advice. This decline highlighted an increase in professionalism within the sector, reflecting ongoing efforts to improve industry standards and enhance consumer trust. In November, Dixon Advisory’s parent company, E&P Financial Group, confirmed its delisting from the ASX, concluding a challenging period marked by negative backlash. This delisting served as a significant marker in the company’s turbulent history and a reminder of the complexities surrounding corporate sustainability and accountability.
December brought further details on the DBFO package, presented by Financial Services Minister Stephen Jones. The recommendations clarified the “qualified adviser” class and proposed reforms to statements of advice, indicating an ongoing commitment to refining the regulatory framework. These reforms represented a continued effort to enhance clarity and transparency within the industry. Insignia also disclosed that it had received a preliminary non-binding acquisition proposal from Bain Capital, signifying potential future changes in ownership dynamics. This proposal pointed to possible future shifts in the structural and operational dynamics of the industry.
Ongoing Reforms and Potential Ownership Changes
In 2024, Australia’s financial advice industry experienced significant changes, driven by legislative reforms, mergers, acquisitions, leadership shifts, and financial milestones. Key announcements and events punctuated the year, signaling transformation and growth within the sector. One prominent event at the year’s beginning was the announcement of the Compensation Scheme of Last Resort (CSLR) levy, set at $241 million. This levy primarily arose from complaints against Dixon Advisory and aimed to support consumers harmed by financial misconduct, underscoring the industry’s dedication to accountability and consumer protection.
In January, the Australian Securities and Investments Commission (ASIC) introduced changes to the financial adviser exam, replacing short-answer questions with multiple-choice ones. This adjustment aimed to streamline the exam process, reducing entry barriers and fostering a more accessible path to certification. These modifications reflected a deliberate effort to create a more inclusive and efficient certification process for financial advisers, signaling an evolution in professional standards and practices within the industry.
