This week in financial advice, the profession grappled with a starkly divided reality. On one side, intense regulatory pressure mounted as ASIC fired a clear warning shot over looming education deadlines, culling non-compliant licensees and signalling its enforcement priorities. On the other hand, significant private equity investment and accelerating consolidation underscored the immense commercial value of scaled, efficient advice businesses. This dynamic is forcing a rapid evolution, creating a market where well-capitalised, technologically adept firms are pulling away. At the same time, a significant portion of the industry faces an existential threat, deepening the divide between a shrinking adviser pool and the expanding ambitions of major players.
Regulatory Clampdown Intensifies Ahead of Deadlines
The regulatory environment hardened considerably this week, dominated by an urgent focus on adviser competence and conduct. ASIC put the profession on notice regarding the fast-approaching 1 January 2026 education deadline, with education provider Kaplan estimating that as many as 1,700 advisers are still at risk of not meeting the standard. In response to the compliance crunch, Kaplan has launched an accelerated program to help advisers qualify in time.
This focus on qualifications is a key element of ASIC’s broader agenda. In a speech outlining its regulatory priorities, the regulator emphasised its commitment to removing non-compliant and unethical players from the industry. This was not mere rhetoric, as ASIC took decisive action by cancelling the Australian Financial Services Licence (AFSL) of Ballast Financial Management Pty Ltd for failing to meet its obligations. Further enforcement saw the auditor of the failed firm Brite Advisors admit to failures and surrender his registration. The regulator also provided some practical relief, extending transitional arrangements for certain reportable situations to give licensees more time to comply with breach reporting changes.
Elsewhere, regulatory friction points continued to surface. The Australian Financial Complaints Authority (AFCA) is seeking to clarify how the retail versus wholesale investor test applies to SMSF clients, a critical distinction for advice providers. The ongoing cost of the Compensation Scheme of Last Resort (CSLR) also remained in focus, with the Financial Services Council (FSC) calling for a one-off government funding injection to cover claims related to the collapse of Dixon Advisory. Adding to the complex landscape, industry veteran David Trowbridge reignited the debate over remuneration, making a renewed call to review the Life Insurance Framework (LIF) commission structure to ensure the sustainability of risk advice.
Private Equity and Consolidation Reshape the Landscape
While regulatory pressures intensified, the market sent a clear signal of confidence in the future of scaled advice with a wave of major transactions. In one of the most significant moves of the year, global private equity firm TA Associates acquired a strategic stake in Viridian Financial Group, a landmark deal that will fuel the firm’s growth ambitions. This injection of private equity money is seen as creating a more competitive dynamic in the advice market, enabling well-resourced firms to invest heavily in technology and talent.
The trend of consolidation continued unabated. US-based Focus Partners expanded its Australian footprint by bringing a high-net-worth advice practice into its network. At the same time, Akumin, formerly Link Wealth, established its first advice network partner since its recent rebrand. This growth among larger players starkly contrasts with the overall state of the profession, which saw a surprising rush of adviser exits at the end of the financial year, reinforcing predictions of a sharp drop in adviser numbers.
This structural shift is also driving changes in leadership. Risk-specialist licensee Bombora Advice announced a significant refresh of its executive team, appointing a new Managing Director and Chair to guide its next phase of growth. The moves highlight a broader industry trend where firms are strategically positioning themselves to compete on scale, capability, and efficiency.
Technology and Client Focus Emerge as Key Differentiators
In this increasingly competitive environment, technology and platform efficiency have become paramount. A new survey revealed that advisers now view platform efficiency as the single greatest differentiator when choosing a provider, driving a flight to quality that could see peripheral platforms that fail to invest in functionality facing an exit threat.
Innovation is being driven by the need for greater efficiency and enhanced client service. One Australian fintech has unveiled an automated service for estate planning administration, aiming to streamline a traditionally complex process for advisers and their clients. In the investment space, a new partnership is set to deliver direct indexing solutions to advisers via the Desktop Broker platform, offering more tailored and tax-effective portfolio options.
This focus on sophisticated solutions is being driven by evolving client needs, which are often sparked by regulatory changes. The impending Division 296 tax on superannuation balances over $3 million is proving to be a significant catalyst for advice, prompting deeper client conversations about death benefit nominations and providing a clear opportunity for advisers to demonstrate their value by navigating this complexity.
Context and Looking Ahead
This week's developments crystallise a narrative that has been building throughout 2025: the bifurcation of the financial advice industry. Previous updates highlighted the rise of "super firms" and the existential threat of the January 2026 education deadline. The major private equity investment in Viridian and the EOFY adviser exodus are the most concrete evidence of this divergence to date. The industry is transforming under pressure, with regulatory enforcement acting as a powerful catalyst for consolidation and technological adoption.
Looking ahead, the next six months will be critical. The countdown to the education deadline will likely trigger a final wave of adviser departures and practice sales. For licensees, the focus must be on ensuring their adviser records are flawlessly compliant to avoid regulatory action. For product providers and platforms, the battle for adviser loyalty will be won on efficiency, integration, and the ability to support practices navigating immense change.
Key Takeaways:
- Short-term (0-3 months): Licensees must urgently audit their adviser registers against ASIC's records ahead of the January 2026 deadline. Advisers yet to meet the education standard should immediately enrol in intensive qualification pathways.
- Short-term (0-3 months): Practices should re-evaluate their fee models and value proposition, particularly as commentary around LIF review and the importance of charging appropriate fees gains traction.
- Medium-term (3-12 months): Practice principals need to make a strategic choice: invest significantly in technology to achieve competitive efficiency or explore merger and acquisition opportunities, as the gap between large, well-funded firms and the rest of the market widens.
- Medium-term (3-12 months): Advisers should proactively build technical expertise in complex areas driven by legislative change, such as the flow-on effects of the Division 296 tax, to deliver and demonstrate tangible client value.
