The financial advice profession is in good health with average revenue per client rising, although challenges around staffing and use of technology remain, according to a new report.
The latest Business Health By The Numbers report, developed in conjunction with the FAAA, found that the average revenue per client for financial advisers is $3,852, an increase of 8% since 2020, while the number of clients per adviser sits at 141.
A statement from Business Health and the FAAA says practice profitability “…also remains strong and suggests that, notwithstanding the turmoil and uncertainties of the past two years, Australian practices have held up well.”
It says salaries take up almost half of practices’ revenue (44.9%) but “…finding the right people continues to be a challenge. Competition for talent remains stiff and two-thirds of practice owners indicate they will be looking to hire in the coming 12 months.”
The two organisations also say “…encouragingly, client satisfaction ratings have remained at the same high level over the past few years, at 4.3/5, showing that advisers have dealt well with challenges such as Covid, ongoing regulatory change, and the declining numbers of advisers in Australia.”
Business Health principal, Rod Bertino, says the overwhelmingly positive feedback from clients suggests they are truly happy with their advisers.
“This result is to the great credit of financial advisers who have grappled with a number of challenges in recent years. However it is important that they continue to focus on their clients and providing them with great service and advice.”
Bertino notes that without clients “…you don’t have a business and, without satisfied clients, your business is at risk. As such, it’s simply best practice to regularly seek feedback from your clients in an objective, independent way so you know how satisfied they are with you and your service.”
More Support Staff
One area of notable change is in the number of support staff per adviser. “This has risen from 1:1 in 2020 to 1.5 per adviser in the most recent report, suggesting a shift in responsibilities and roles within practices.”
Bertino says this may be an area that practice owners should review.
“A higher ratio could suggest areas where greater efficiency could be achieved. On the other hand, a lower ratio could mean that advisers are doing some of the admin work and not making best use of their time.”
Tania Milnes, general manager, memberships at FAAA, adds the report shows “…a profession with a bright future, notwithstanding the ongoing challenges.”
