As the financial advice industry continues to shrink, the face of the average Australian adviser has changed once again, insights from our latest 2023 Landscape report reveal.
Your typical industry colleague is now a little bit younger, privately-licensed and operating in a small practice. They’re also earning the same salary as they were a year earlier. But the number of clients they serve and their funds under advice have ballooned in the past few years.
Each year, Adviser Ratings collects detailed demographic data to paint a picture of what the typical adviser and their business look like, including their client base, fees, insurance, software and platforms of choice, and where they get their research.
Since we started compiling these insights, a few things have changed:
-Advisers are managing a higher client load: The average adviser is now seeing 91 recurring clients, which is eight more than they were looking after three years ago.
-Demand for one-off advice is still surging: Since the pandemic, the number of one-off clients has jumped 33 per cent. The average adviser is now seeing 28 one-off clients a year.
-Funds under advice have shot up: FUA per adviser have consistently risen year on year. Since 2020, they’ve increased 11 per cent, to an average of $82 million. Meanwhile, practice FUA has jumped by more than a third, to $205 million.
-Platform and investment choices have shifted – slightly: The typical adviser is now opting for their licensee’s investment consultant solution. Previously, it’s been a battle between Lonsec and Morningstar to be the investment consultant of choice. Morningstar is still the average adviser’s chosen research house.
-Fees have risen again: As we pointed out last week in our Adviser Landscape preview, the median fee rose to $3710 last year. While the increase hasn’t been as steep as we’ve seen in the past, the upward pressure on fees is continuing, as we expect more rises in the next 12 months.
At the same time, there have been some notable consistencies:
-Average adviser salaries haven’t kept pace with inflation: The average adviser salary has increased 4 per cent since 2020. It now sits at $135,000.
-The typical client profile has remained static: Although advisers are seeing more clients, the type of client has remained the same – a couple in their mid-50s.
What’s next?
The theme from the past few years has been advisers doing more with less. We’re now seeing the typical adviser carrying a much higher average client load, with thousands of industry departures since 2018. Inflation also meant the cost of services in the latter half of the year jumped substantially. Based on our research, we expect both fees and adviser salaries to increase at a higher rate in the next year.
Figure 1 – The average Australian adviser: 2023
Source: Adviser Ratings – 2023 Australian Financial Advice Landscape report.
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