Fewer clients, lower FUA but advisers generating more revenue
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.
Average revenue per adviser $1.1 to $1.6M?? No way.
I suspect this may be average revenue per practice, skewed to the larger practices who participate in these sort of surveys.
Totally agree. We run a very lean and efficient practice and manage half of that. Plus who has time to do these surveys? Too busy working.
We’re also managing half of that with 119 clients…revenue a smidgen over $800,00 with one adviser.
Is that a two year cumulative revenue figure of $1.6m per adviser?
Pls clarify. Is a “client” a couple or is a “client” an individual? 1.1M divided by 133 clients is $8270 p.a. per client. Really?
Yeh as per other comments the article doesn’t add up.
So $1.6 Mill revenue per adviser / 129 clients = $12,400 fees pa per client.
And these clients average $612k FUM each.
Cool 2% pa fees per client 🙂
Ahhhhh not
“average total revenue generated per adviser had increased from $1.1 million to $1.6 million” ??? I wish it actually was, then we could all afford the increase in the ASIC Levy.
This is a good survey to highlight the impact of bad regulation on advice. Dear ASIC, How are we getting to a stage where the average advice fee is now $12,400 per client. ($1.6/129 clients).