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

Practices want new clients but at the expense of less profitable ones

« back to media

27 April 2023 by Chris Dastoor, Professional Planner

Article link: https://www.professionalplanner.com.au/2023/04/practices-want-new-clients-but-at-the-expense-of-less-profitable-ones/

Over one-third of advice practices actively plan to take on more clients but it will most likely be at the expense of less profitable ones.

According to findings from the latest Adviser Ratings ‘Landscape Report’, these practices are clear on the type of clients they’ll recruit.

Adviser Ratings founder Angus Woods tells Professional Planner the client take-up comes off the back of practices that have spent the last few years finding partnerships or otherwise consolidating their business through scale.

“They already have the efficiencies in place to bring on more clients,” Woods says.

While the orphaning of clients is still happening, although it has slightly stalled, practices are showing a willingness to lose clients that aren’t profitable, Woods says.

“A lot of practices are taking on new clients, but they’re still jettisoning their non-profitable clients and that’s an ongoing theme we’re seeing,” Woods says.

The report found process efficiency is the top priority for almost all advice business and most practices feel they are on top of compliance, reporting a sharp year-on-year drop when it comes to seeking help in that area.

Additionally, adviser-to-staff ratio has increased significantly with businesses reducing their spending on outsourced paraplanning.

“The outsource versus insource paraplanning took a shift back to insourcing,” Woods says.

“I think the advisers are trying to feel a bit closer to the process and making sure they’re getting the Statement of Advice out quicker as opposed to an outsourced environment.”

Although the research found most advisers plan to stay in the industry a fifth have reservations and this is dependent on reform outcomes including the experience pathway which will give a carve out on the education standard for advisers with a decade of experience.

Slightly more open to advice

Some 80 per cent of Australians who want advice couldn’t afford to pay what the average adviser charges.

The report found the median cost of advice has risen 5 per cent to $3710, while under 20 per cent of Australians are willing to pay between $2500 and $5000 for advice. However, this is a 4 per cent increase compared to last year.

Woods says market conditions over the last couple of years has led to more Australians open to professional advice.

“There was a lot more stimulus in 2020/2021 which carried through and people started to invest in 2022 and saw the upheaval in the equity markets which is around the time we did the survey in January 2023,” Woods says.

The number of advised consumers has dropped from 13.9 per cent of Australians in the 2018 report to 10 per cent in the latest data.

The average client is 56, paying an average annual fee of $4250 and is most likely seeking out advice for building super and retirement.

In contrast, the average adviser is 49, degree qualified, makes $145,000, prefers to use model portfolios and listed investments.

Advanced tech

On the tech side of things, Woods observes there is a willingness for practices to “move around” when it came to their man advice software.

“We saw more advisers using multiple solutions this year, especially on the software side not platforms,” Woods says.

He adds advisers are more willing to “modularise their environment” by utilising different tech components, but not as much when it comes to platforms.

Despite rating poorly, Iress continues to be the most used advice software.

“Whilst Xplan is dominant in terms of market share, people are using alternative tools to supplement,” Woods says.

HUB24 dominated the best platform ratings, marking the highest score for best advice platform, best client experience, best adviser experience, best for new advisers, best functionality, best adviser support, overall investment options. Similarly, Lonsec swept all categories for best research house.

Worksorted was rated best advice CRM, while Product Rex was the highest for best advice software.

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