Fewer clients, lower FUA but advisers generating more revenue

Mike Taylor

Managing Editor and Publisher

13 July 2023

Financial advisers are seeing fewer clients but generating more revenue, according to a new analysis generated by financial planning software provider, Iress.

The Iress Financial Advice Efficiency Report compared adviser metrics between 2021 and 2023 and concluded that the average number of clients per adviser had decreased from 133 to 129 over the period, but that the average total revenue generated per adviser had increased from $1.1 million to $1.6 million.

As well, it has revealed that the average fund under advice per adviser has declined from $83.4 million in 2021 to $78.8 million this year.

The Iress report heavily pushes the advantages of advice business adopting technology but, notwithstanding this, its report also shows that the average technology spend per full-time employee is down from $12,900 in 2021 to $10,400 this year.

The Iress report also found that, in general, advice firms were taking less time to produce all types of advice documents with strategy papers for a new client taking four hours in 2023 compared to 5.6 hours in 2021, while basic client statements of advice (SOAs) are taking 6.7 hours in 2023 down from 8.1 hours in 2021.

“Compared to two years ago, financial advice firms are spending more time on technology-related training,” the report said.

“From 2021 to 2023, the average number of training hours allocated per month per adviser grew from 2.7 to 3.6 hours. This upward trend demonstrates the growing recognition of the value of staying up-to-date with technology that enhances the advice experience. Training for support staff however dropped slightly from 2.8 hours per month to 2.5 hours per month.”

The report found that cyber and data security represented the greatest technology challenge facing financial advice businesses, followed by the time taken to product advice documents and the integration of applications.