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Half of advice firms looking to get bigger

Mike Taylor19 October 2023
Liability insurance Australia premium increase written

National Australia Bank may longer be in the financial planning business but it has produced new research declaring that the outlook for financial planning is positive.

It pointed to more than half of advice firms looking to get bigger with achieving adequate scale a top priority.

The research, the 2024 NAB Accounting and Financial Planning Report, is based on interviews with accounting and financial planning firms around Australia, involving 75 accounting firms and 34 financial planning firms.

Importantly, it found that all financial planning firms surveyed were projecting revenue growth, with 41% projecting revenue expectations over the next 12 months as being very good, while 44% described them as good and 15% described them as satisfactory.

The report pointed to research showing that fewer than 10% of Australians are now receiving retail financial advice at a time when cost of living pressures make advice more important as ever.

“Most firms I work with are excited about the stabilisation in terms of adviser numbers and the fact that there are more clients to target than there are advisers to look after them,” according to NAB Client Director, Philip Pleasant-George.

“Strategically, they’re focused on how they attract the ideal client and grow that relationship.” That might include targeted segments of the market like female investors,” he said.

In similar fashion to previous research, the NAB exercise identified regulation as the number one challenge for financial planning firms, followed by time management and then hiring, retaining and training staff.

It found that staff, new technology and acquisitions are popular mechanisms of growth for planners.

“More than half of firms are looking to buy – this may be traced back to the need to build scale in order to meet increasing compliance and regulatory requirements,” it said.

Importantly, on the question of whether firms intended to purchase or sell fees, equity or all or part of a business in the next two years, 49% of respondents pointed to an intention to purchase, 21% to selling and 30% said they were unsure.

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire

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Banks Sniffing big time
4 months ago

Don’t NAB still provide Advice via business banking channel Advisers and JB Were owned Advisers ?
Oh that’s right that’s wholesale only and somehow not providing advice.

Banks licking their lips for re-entry via Robo sales rubbish / QAR call centres

4 months ago

Yep, it’s a complete furphy to say banks have exited advice. They have only exited strongly regulated advice. Most banks have actually expanded their lightly regulated (aka “wholesale”) advice operations. They are eagerly awaiting further lightly regulated opportunities, such as the carve outs for banks proposed by Michelle Levy.

4 months ago

Perhaps the flip side of this is that half of advice firms are quite happy with the size they are now, making a decent living providing a professional service to a manageable number of clients they have good relationships with.

“Scale” is not necessary for professional financial planning. Scale is only a requirement for advice firms controlled by licensees and equity partners whose primary focus is selling more inhouse product.