One-Off Client Fees: An Opportunity for Market Entry and Adviser Revenue Growth

Financial advice is a crucial service for many Australians seeking to manage their finances effectively, plan for retirement, or make significant investment decisions. However, the cost of this advice can vary widely, with a notable difference between fees for recurring services and one-off consultations. Understanding the dynamics of these fees is essential for Australians aiming to make informed financial decisions and is key for advisers looking to capture new market share and foster engagement that transitions into long-term, ongoing relationships.

With a substantial and continually growing advisory market, Australians are spending billions of dollars annually on financial advice. This market encompasses a variety of services, from retirement planning and investment management to tax planning and estate management. The total amount paid for fees to financial advisers in a year is estimated to be approximately $7.4 billion, reflecting both the demand for these services and the significant fees charged by advisers. This amount includes the two primary ways financial advisers typically charge their clients: recurring fees and one-off fees. As seen in Figure 1 below, once-off clients are increasing.

Figure 1: Adviser Client Distribution

Source: Adviser Ratings (Note - inner donut=2020, outer donut=2024)

Recurring fees are usually charged on an ongoing basis, often annually, and are based on the percentage of assets under management or a fixed retainer fee. These fees can range from 0.5% to 1.5% of the client's portfolio value per year, though some advisers may charge higher rates for more comprehensive services. On the other hand, one-off fees are charged for single consultations or specific advice sessions. These can vary based on a set amount, a certain number of hours, or an hourly rate, depending on the complexity of the advice provided. According to our latest adviser survey data (as part of our 2024 Australian Financial Advice Landscape Report research), the average charge for this type of consultation is about $1,700.

Despite the substantial amount of money managed and the fees charged in the financial advisory market, there is a significant portion of the population that is not engaging with financial advisers. This untapped market represents a potential for increasing the overall investment in financial advice. The primary barrier is that the cost of both recurring consultations and one-off sessions is beyond what many consumers are willing to pay for advice, as seen in Figure 2 below. Addressing this issue is crucial to attract these clients into the advisory world. Leveraging technology to reduce costs can make financial advice more accessible and appealing to a broader audience.

Figure 2: Consumers Willing to Pay Vs Adviser’s Average Fee

Source: Adviser Ratings (Note – figures are dollar amounts)

While the benefits of recurring financial advice over one-off consultations are clear—providing continuous support, long-term cost savings, and a holistic approach to financial management—it's important to recognize that one-off clients represent the next potential group to transition into recurring relationships. To facilitate this transition, we need to address the barriers that currently prevent one-off clients from engaging in ongoing financial advice. Leveraging technology to reduce costs and, consequently, fees, can lower the entry barriers for these clients. By making financial advice more accessible and demonstrating its value, we can encourage them to see the benefits and eventually commit to recurring advisory relationships.

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Adviser Ratings

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