For some, the Christmas and New Year periods are a time to relax and recharge with family and friends. For others, the change in routine, location, and different stimuli leave us contemplating the year that was and randomly getting ideas for the year to come. Either way, the quiet of the first few weeks of 2025 provides an opportunity to think about our advice practices and plan for the year ahead.
The confluence of regulatory reform, technological advancement, and evolving client expectations presents a unique opportunity for practices to reimagine every aspect of their business. Those who adapt to change and actively embrace it will create sustainable competitive advantages in this dynamic environment.
Preparing for 2025
One way to prepare your practice for 2025 is to participate in the Landscape Report survey. Completing the survey offers a valuable opportunity to reflect on where your practice ended in 2024. The survey prompts practices to consider:
- Business model sustainability
- Their client engagement strategies and outcomes
- Technology adoption and efficiency metrics
- Professional development approaches
- Investment strategies and product selection
The survey also provides a valuable benchmarking tool, allowing you to compare your practice's performance against your peers and industry leaders. This comparison can help you identify areas for improvement and is particularly valuable given the rapid pace of change in the profession expected in 2025.
Licensing and Business Model Considerations
On the one hand, licensing and business models are the most basic choices financial advice practices have to make, but on the other hand, they can have the largest impact on what happens from that point on. So, the first place to reflect on is whether you are partnered with the right licensee and whether you have the right business model in place to achieve your personal objectives.
The last five years have seen a trend toward self-licensing continuing. The 2024 Landscape Report shows that small licensee groups of one to ten advisers have seen a 17% rise since 2018, reflecting a desire for greater control and flexibility.
Key considerations for practices to consider in 2025 when thinking about whether their current licensing arrangements best serve their needs include:
- The impact of regulatory reforms on licensing requirements
- Cost-benefit analysis of different licensing models
- Technology and compliance support needs
- Professional development and training requirements
- Risk management and professional indemnity insurance arrangements.
Client Experience and Service Models
Once the licensing and business model foundation is set, ensuring your service model aligns with your client's preferences becomes a significant driver of practice success. The 2024 Landscape Report showed that practices leveraging data analytics for client segmentation and service delivery consistently achieve higher profitability and growth, demonstrating that they had successfully aligned their service model to their client's preferences.
Rethinking Advice Delivery
A critical aspect of client experience is advice delivery. At the end of 2024, the government confirmed that Statements of Advice will be replaced with more flexible, client-centric advice records, marking perhaps the most significant opportunity to reengineer your client's experience. Rather than waiting for legislative certainty, leading practices are already exploring innovative approaches to advice delivery. Video records of advice discussions, AI-powered summaries, and interactive modelling tools are just some of the options already being implemented by forward-thinking practices. Research shows that only one in seven advised clients read their SOA, but we spend over 25 hours and thousands of dollars creating them. This inefficiency represents a massive opportunity for practices willing to reimagine their approach to advice delivery.
"This is a once-in-a-generation opportunity to rebuild advice documentation from scratch," notes Angus Woods, Managing Director of Adviser Ratings. "The practices that take time now to design their ideal client experience, rather than simply trying to replicate current SOAs in a different format, will be best positioned for growth in 2025."
Technology as a Growth Driver
The second area to consider in client experience is technology. The correlation between technology adoption and practice profitability is clear. The 2024 Landscape Report shows that tech-savvy practices operate with 55% fewer staff while maintaining high service standards. These practices achieve a minimum of 10% higher profit margins than less tech-savvy practices. Looking ahead to 2025, practices should be evaluating:
- Whether their current technology stack supports their growth ambitions
- If their client engagement tools meet evolving client expectations
- How they can leverage data analytics to drive better decisions
- How AI could enhance their operations (45% of practices are already using or planning to use AI)
The Power of Data Analytics
Improved technology also allows leading practices to use data analytics to transform their operations. Practices using advanced client analytics report 15% higher revenue per client and significantly improved retention rates than traditional segmentation methods. The most successful firms are:
- Using advanced analytics to identify and target ideal clients
- Optimising everything from meeting scheduling to advice delivery
- Predict peak demand periods and staff accordingly
- Leveraging AI-powered analytics to automate routine tasks
Investment Strategies and Product Selection
Finally, practices that consider their service model should also consider their product selection. The investment landscape continues to evolve, with significant shifts in how advisers approach portfolio construction. On the other hand, product implementation and reporting inefficiency are significant drivers of practice inefficiency and cost. Key trends include:
- Growing use of managed accounts for efficiency and scalability
- Selection of products based on straight-through origination and digital reporting consolidation abilities
- Increased adoption of ETFs (36% of advisers plan to boost their ETF allocations)
- Rising interest in ESG investing (54% of consumers now consider ESG factors)
- Strategic blend of active and passive management strategies
Building a Culture of Innovation
In saying this, to achieve the kind of transformation required to implement much of the above, practices need to have a culture of innovation and continuous improvement. Success in 2025 will require more than just technological adoption or process improvement. Practices should:
- Regularly review and optimise business processes
- Invest in team training and development
- Actively engage with industry peers and thought leaders
- Commitment to client-centric innovation
- Use data-driven decision making
We would note—even if you think this doesn't sound like you—consider the amount of regulatory change you've successfully adapted to over the past 10-15 years. Change is a daily skill in advice practices, whether we admit it or not—or how much we long for the "good old days".
The Role of Professional Development
Going hand in hand with change management is professional development. The most successful practices are creating comprehensive learning environments that combine formal education, peer learning, and industry engagement. As the profession continues to evolve, investment in professional development becomes increasingly crucial. The top practices are:
- Creating comprehensive learning environments for their teams
- Actively participating in industry events and peer groups
- Leveraging technology for ongoing education
- Building expertise in emerging areas like ESG investing and intergenerational wealth transfer
Looking Ahead
The financial advice profession is at a pivotal moment. The combination of regulatory reform, technological advancement, and evolving client needs creates unprecedented opportunities for practices willing to embrace change. Those who take time now to reimagine their operations—from advice delivery to technology adoption to client engagement—will be best positioned to thrive in 2025 and beyond.
Success will require more than incremental improvements to existing processes. The most successful practices will be those that fundamentally rethink how they operate, creating more efficient, client-centric, and profitable businesses. The Landscape Report survey provides a framework for this reflection, helping practices identify where they stand today and where they need to focus to capture tomorrow's opportunities.
The message is clear: preparing for 2025's opportunities is something to do now, not when the year is finished. By taking a strategic approach to change and leveraging insights from industry research like the Landscape Report, practices can position themselves for success in the evolving advice landscape. The practices that embrace this opportunity to reimagine their operations will not just survive but thrive in the years ahead.
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