Is the average adviser generating $400,000 a year?
New analysis has revealed just where the money is going in the financial planning equation, with the average financial adviser generating around $400,000 and licensees picking up about between $15,000 and $40,000 per adviser.
The analysis to be released, in part at today’s Financial Newswire Platforms, Wraps and Adviser Technology Conference in the Hunter Valley forms the basis of a report on the factors going to the broader profitability of the financial planning profession.
The analysis by WealthData principal, Colin Williams also shows that over the past decade it is the platform companies such as HUB24 and Netwealth which have emerged as the financial winners in the wealth management equation.
The analysis reveals that while large wealth management firms and fund managers have struggled over the past five years, mostly failing to keep up with average returns on the Australian Securities Exchange, platforms have prospered.
WealthData principal, Colin Williams said the analysis showed that HUB24 and Sequoia had recorded the greatest gains, while AMP, Insignia and funds manager, Platinum had recorded the greatest losses.
It shows that, by comparison, smaller and mid-sized wealth management firms have managed to track the ASX average in terms of return on investment.
Williams noted the average gross $400,000 per year being generated by advisers and said that early analysis indicated that licensees were collecting between $15,000 and $40,000 per adviser.
He noted external research which, 12 months ago, indicated that a typical financial planning practice earns close to $1.2 million a year.
Unless I am mistaken this data must be taken from platform data. Less than 50% of our total revenue would be coming through platforms. I would admit our % would be lower than most through platforms but at $400k per adviser, with todays compliance costs, staffing and rent etc, you either work from home and work long hours or you have a job that you call a business.
Note I am not putting down advisers that are at this level, I was there too once. $400k should be enough to have a business but the government is ensuring that you are locked up in red tape BS all the time so that this is not possible in most circumstances to realise a profit above your value as a wage earner after expenses (at a minimum you should be earning 20% PBT after expenses including your wages). Meanwhile the govt is holding enquiries as to why advice is so expensive. Muppets.
Yes 100% agree. Even earning way more than $400k and significant profit work waaaay too many hours to cope with all the BS red tape and the continual lack of common sense
I think it’s important to note that this is all self-reported data. We have no standard terminology and to say average gross, what is gross? before expenses, before tax, before Licensee fees. very misleading and perhaps an attempt to sensationalise and capture headlines (which it did, otherwise I would not feel compelled to write this comment!). I far better metric is what the average adviser reports as assessable income from their personal exertion activities.