Search by:NameLocation
 
 

Media

In Brief: July Edition  

Do you have a good advice story?

Are you an adviser with a customer who'd like to tell their story how your advice helped them?

Are you a customer with a good story about how advice has added value to your life?

Tell us about it

Advisers committed to the industry as advice becomes ‘in vogue’ again

« back to media

21 May 2025 by Beata Kuczynska, Professional Planner

Article link: https://www.professionalplanner.com.au/2025/05/advisers-committed-to-the-industry-as-advice-becomes-in-vogue-again/

The overwhelming majority of advisers are committed to staying in the industry, underscoring a distinct cultural shift in the profession since the aftermath of the Hayne royal commission.

In a briefing by Adviser Ratings ahead of the release of the 2025 Financial Advice Landscape report, the research found nine in 10 advisers are committed to remaining in the industry – up from 74 per cent in 2021.

Adviser Ratings managing director Angus Woods said it is encouraging that more and more advisers and practices are showing a willingness to stay.

“Advice is actually in vogue again. [For] those that live in probably an echo chamber who have been somewhat battered and bruised, it’s nice to hear some positive outcomes coming through within the industry,” Woods said in a webinar on Tuesday.

Over the last five years, the number of advisers unsure about staying or wanting to depart the industry has slowly declined.

Woods said the view of certainty would be a positive reflection on the industry, both internally and externally.

“Not only from an investment point of view, but it also starts to give certainty to government and to the Australian public, that we do have a foundational support.”

Profit margins on the up

Part of the reason adviser retention was improving was due to improved profitability of businesses which the research found to be at 25 per cent.

Last year’s Financial Advice Landscape had a 21 per cent profit margin and was pulling in average yearly practice revenue of under $500,000.

The increased profit margin figure comes as the researcher also reported advisers would need to charge annual client fees of $4000 to be financially viable.

Woods said the advisers that stuck it out during the Hayne royal commission are now reaping the benefits of their commitment.

“It was a trying time for the industry, way back then, but focusing on the future, those that did remain, that went through training, that basically reengineered and refactored their businesses, are now seeing profitability margins approaching 25 per cent.”

Woods said while higher wages have eaten into some of the profitability margin, the increase in fees have somewhat balanced it out.

He attributed the notable interest from M&A players in terms of growth and the volume of activity to the increased average profit margin.

This year’s report found advice practices will be looking to make significant changes over the next 12 months.

“It’s now about improving their business model and increasing that margin even further,” Woods said.

The research found 43 per cent of practices will be looking to improve process efficiency and 36 per cent are open to new business opportunities.

Some 22 per cent will be looking into adopting new IT solutions, including AI products to increase their profit margin.

Super struggles

Super funds will have to navigate the challenge of serving their members in tandem with the advice industry, with mounting regulatory obligations like the Retirement Income Covenant.

The covenant requires funds to offer a retirement income strategy to members, and the government has made clear that advice is a necessary component.

The findings showed there are currently 609 advisers serving super fund members, but 2.5 million members will retire over the next 10 years.

The roughly 15,600 on the ASIC Financial Adviser Register, which includes the 609 super fund advisers, are currently servicing 1.8 million clients at the moment.

The current landscape of super fund advice models is mixed, with some offering holistic advice, others only offering intrafund advice, or some mix of both.

While not all of the upcoming retirees will need complex advice, some will, and this will place a strain on the super funds.

IFS and Aware Super have the highest number of advisers, with 120 and 112 respectively. While Australian Retirement Trust has the highest number of intrafund advisers, at 89, but they do not offer holistic advice with the fund relying on external partnerships.

Comments

No comments added.

Add comment

Name

Email

Comments

Enter code:*

Refresh code

Add comment

« back to media

Adviser Ratings

For consumers

For advisers

 
  Join as an Adviser
 

While we may facilitate the review and introduction of Advisers, Customers of Adviser Ratings will be responsible for entering into their own agreement with Advisers introduced through our website. Adviser Ratings does not provide personal financial advice nor do we recommend or suggest a particular adviser is right for you. We provide information of a general nature and we do not take into consideration your personal objectives, financial situation or needs. Always consider whether the advice and information you are provided suits your needs. Adviser Ratings does not endorse, accept or adopt the Advisers on our site, the content of any profiles or the comments or discussion in any community forums. For further information about How We Rate Our Advisers, click here. Per quote in our video, refer KPMG research undertaken for Financial Services Council

Adviser Ratings Pty Ltd (ABN 18 154 273 640 ) (AR 466730 ) is a Corporate Authorised Representative of IPraxis Pty Ltd (ABN 39 114 365 007) the holder of Australian Financial Services Licence No. 329337. We are a Sydney based company located at - Level 22, Tower 3, 300 Barangaroo Avenue, Sydney, NSW, 2000, Australia

© 2021 Adviser Ratings Pty LtdTerms of Use | Privacy | Contact