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Practice revenue and growth accelerate despite talent shortage

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24 June 2026 by Shy-Ann Arkinstall, Money Management

Article link: https://www.moneymanagement.com.au/practice-revenue-and-growth-accelerate-despite-talent-shortage/

While the number of advisers has declined, Adviser Ratings says profit margins and practices sizes are on the up as the ‘traditional middle’ thins amid ongoing consolidation.

 

While the number of advisers has declined, Adviser Ratings says profit margins and practices sizes are on the up as the “tradition middle” thins amid ongoing consolidation. 

Adviser Ratings’ 2026 Landscape Report shows a net loss of 391 advisers in the 12 months to 1 January 2026, with the total landing at 15,084, down from 15,477 a year prior. 

This number has fluctuated somewhat over the first six months of the 2026 calendar year, according to Padua Wealth Data, peaking at 15,170 at the end of May before starting the pre-end of financial year decline that typically occurs in June. 

Although this is consistently raised as an issue for the profession, it has created a positive environment for advice businesses, driving up fees and profit margins. 

The median advice fees have consistently increased in recent years, jumping 93 per cent since 2019 from $2,510 up to $4,837 in 2026, though Adviser Ratings said the rate of growth has slowed with an uptick of just 3.6 per cent since the start of 2025. 

Average funds under management (FUA) per adviser has ticked up from $99 million in 2025 to $102 million, however, the average number of ongoing clients has increased by just one to 102 per adviser, plus 34 one-off clients. 

Even with this, a strong focus on efficiency and technology growth has seen the average practice margin increase from 21.0 per cent in 2025 to 23.3 per cent, while the overall picture has improved for the practice market. 

The report found that practice revenue is sitting at an average of $674,000, up 40 per cent since 2023, and the portion of practices achieving more than $1.5 million revenue has increased from 17 per cent in 2023 to 28 per cent in 2026, with uplift also seen at the bottom of the spectrum. 

“The ‘no profit’ cohort has nearly halved, from 17.7 per cent in 2023 to 9.4 per cent in 2026, while the 30-40 per cent band jumped 6.3pp in a single year to become the second-largest segment. Weight has shifted decisively into the top half of the curve, lifting the average net margin to 23.3 per cent, its highest reading in the four-year series,” the report said. 

Average revenue by practice size 

Number of advisers  2026  2025 
1  $674K  $607K 
2-4  $1.61 million  $1.86 million 
5+  $6.42 million  $5.14 million 

Source: Adviser Ratings, June 2026 

Consolidation impact 

This revenue growth has come despite some aspects of cost of operating increasing. For example, the value of an adviser has grown alongside the talent shortage and high demand for service, increasing $4,500 over the past calendar year for an average salary of $149,500. 

Even so, almost two-thirds (62 per cent) of practices still intend to grow their headcount. 

Feeding into this is the dual trend for advisers to either go down the self-licensing path and establishing a small business, or for businesses to consolidation achieve scale and drive growth. 

With this, Adviser Ratings said there has been a “thinning” of middle practices. 

“The sub-$250K [revenue] cohort has more than halved (18 per cent to 8 per cent) while the $1.5M+ and $2.5M+ bands have nearly doubled. The traditional middle ($500K–$1M) is quietly losing ground: practices are either professionalising up the stack or being absorbed.” 

Of those planning to grow, 41 per cent said it will be by organic means only, five per cent by acquisition, and 16 per cent through both. Meanwhile, zero said they are planning to decrease for the second consecutive year. 

“Growth intent is no longer the differentiator: execution capacity is,” the report said. 

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