Financial advisers have lifted their fees a further 5 per cent in the past year, with the median client now paying $3710, research from the soon to be released Adviser Landscape Report has revealed.
In five years, the median fee has jumped by close to 40 per cent, but last year’s rise wasn’t as steep as we’ve seen previously. Nonetheless, 90 per cent of advisers have told us further rises are on the cards, as inflation, interest rates and other cost pressures continue to bite.
Figure 1 – Median fees: 2018-22
Source: Adviser Ratings Landscape Report 2023.
Our research also showed there continues to be a significant gulf between the highest and lowest fees, with some advisers charging up to $13,000.
At the other end of the scale, the lowest fee was $1000, which is still more than three-in-four Australians who want financial advice could pay, our survey showed. Most consumers say they could pay only $500 or less for advice.
This comes as we await further word on which recommendations from the Quality of Advice Review Treasury will adopt. In February, the Assistant Treasurer and Financial Services Minister, Stephen Jones, said he would consult widely on the report’s proposals, which are aimed at improving both advice affordability and quality.
Figure 2 – Consumers’ capacity to pay for advice: 2021 vs. 2022
Source: Adviser Ratings consumer survey *Note Outer circle = 2021; Inner circle = 2022
What consumers want and an adviser’s value
For this year’s report, we also measured consumer demand for advice through the record number of leads on the Adviser Ratings website. More than half of the consumers who visited the site were aged 56 or older, with advice on building super, preparing for retirement and sharemarket investment among the top areas of demand.
Figure 3 – Age distribution of leads generated through Adviser Ratings platform
Source: Adviser Ratings.
Unsurprisingly, consumers’ financial confidence has taken a hit in the past 12 months, but unadvised Australians have been more shaken than those with a financial adviser. Almost a quarter of unadvised consumers were not at all confident about the next year, compared with fewer than one-in-six advised clients.
Figure 4 – Consumers’ financial confidence for upcoming 12 months
Source: Adviser Ratings consumer survey.
When we asked consumers what they wanted advice on, how to invest a small amount of money came out on top once again, followed by information on budgeting and shares.
The Australian Financial Adviser Landscape 2023 report will be released soon and we’ll continue to bring you the latest insights from the report over the coming weeks.
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Comments7
"Are there any surveys for RISK-ONLY advice fees? Thats where the real consumer existence is to be found"
Bill Brown 13:05 on 13 Apr 23
"Its time for our Profession to move on from this argument. We are no longer the desperate industry we once were, it's no longer a race to the bottom. Who cares what the firm down the road charges. No two businesses are the same, and no two Adviser would value their self-worth the same. What we must be asking ourselves, is what are we really worth? Myself as a post grad deg. Adviser that has made it through the shit show of the last decade, I wouldn't do this job for less than $250,000pa. "
Ben 20:34 on 12 Apr 23
"What would happen to the cost of advice if it was mandatory for the advice to be limited to three pages. Also, how should the politicians be punished, unmercifully, for changing the goalposts. Discuss."
Molly 15:59 on 12 Apr 23
"I don’t doubt ongoing adviser service fees have gone up over the last few year, BUT the main reason the average fee has gone up is because advisers have let go of a lot of smaller and lower fee paying clients. The actual increase in adviser fees for the remaining clients is overstated with this type of analysis. "
Lyle 15:51 on 12 Apr 23
"yeah - none of these types of survey results make it clear, or the writer does not make it clear, especilly when the comment about "Most consumers say they could pay only $500 or less for advice" ....ongoing?? no-one in their right mind would accept $500 as an ongoing fee, that would not even pay for the PI insurance per client let alone do a review meeting. Athough this was a simple question it begs the need for the results to be made much clearer in the wording. "
Roland 15:39 on 12 Apr 23
"Generally annual fees Jason."
Michael 15:16 on 12 Apr 23
"Would this be for initial or annual advice? "
Jason 15:05 on 12 Apr 23