As election season hits full swing and campaign promises flood the airwaves, financial advisers find themselves in familiar territory: waiting for meaningful regulatory reform while politicians debate the future of advice accessibility. The last three years have seen the Quality of Advice Review (QAR) recommendations languish and only partial implementation of the promised Delivering Better Financial Outcomes (DBFO) reforms, leaving many in the profession frustrated by unfulfilled promises to cut red tape.
Yet, published data from the 2024 Australian Financial Advice Landscape Report and early analysis of the 2025 data reveal a surprising narrative: despite this regulatory stagnation, the financial advice profession has not merely survived—it has evolved and thrived through innovation, adaptation, and client-focused transformation.
Stability After the Storm
The profession's resilience is best demonstrated by the stability in adviser numbers. After a period of decline following the Hayne Royal Commission and education reforms, adviser numbers have now settled above 15,500. This stability, coupled with the fact that 90% of current advisers have no intention to leave the profession, is a strong indicator of the profession's resilience.
This stability coincides with a clear signal that advisers have reaffirmed their commitment to the profession. The exodus has slowed dramatically, and survey data shows that the percentage of advisers intending to leave the profession has halved to just 5%, down from 10% in 2022.
"The industry has reached a point of equilibrium," explains Angus Woods, Managing Director of Adviser Ratings. "With most advisers having completed their education requirements and gained clarity about the future of the profession, the vast majority of the current cohort have made it clear they are here to stay."
Client Growth and Profitability Surge
Most impressively, practices have significantly expanded their client base. The number of recurring clients per adviser has surged to 97, up 7% from the 91 clients advisers saw in 2022, and off a low of 83 in 2020. This growth has been accompanied by an increase in funds under advice per client by 10% and rising median adviser fees, up 26% over the past 3 years.
The business impact of the profession's success has been substantial. The Landscape Report found that unprofitable practices have decreased by 20%, 83% of practices increased their revenue in the past year, with only 3% experiencing decline. The most successful practices now achieve profit margins exceeding 40% while increasing revenue by more than 15% year-on-year.
Technology as the Great Enabler
Technology adoption has been a key driver of this success. The report shows that tech-savvy practices operate with 55% fewer staff per adviser while maintaining high service standards—a remarkable achievement that speaks to the power of digital transformation.
A significant majority of practices are now using AI, with a further 65% increase over 2024 usage, while 22% have implemented digital applications improvements specifically for efficiency gains. These investments are paying dividends: practices leveraging technology report average profit margins between 24-40%, compared to just 14-20% for those without digital solutions.
The Rise of Privately Owned Licensees
It’s likely not surprising, but the last three years have seen the most dramatic shifts in licensee ownership. When Labor last sat on the opposition benches, 16% of advisers were licensed by diversified licensees. That figure has dropped to less than 1% today. The shift toward privately owned licensees has continued unabated, unlike three years ago when privately owned licenses with under ten advisers represented the largest segment of the market. This has now shifted to privately owned licences with over 100 advisers due to a combination of consolidation up the brackets and the final divestment by diversified licensees of their advice businesses. This trend toward self-determination demonstrates advisers' confidence in charting their own course despite regulatory uncertainty.
Client-Centric Innovation
Leading practices have moved beyond annual check-ins to more regular, meaningful conversations with clients about topics of immediate concern. The ongoing cost-of-living crisis has dominated these discussions, with rising inflation and housing costs driving more Australians to seek financial advice.
Practices have also enhanced their service delivery through new digital tools, which help clients visualise their financial goals and understand the impact of different scenarios. This focus on client experience has translated into business results, with practices using advanced client analytics reporting 15% higher revenue per client and significantly improved retention rates.
Investment Strategy Evolution
Investment approaches have also evolved, with a continued shift away from active investment funds and managed funds, toward ETFs, off-the-shelf SMAs, and passive investment funds. The data shows that 39% of advisers plan to boost their ETF allocations further over the coming year, reflecting a focus on cost-effective, transparent investment solutions.
Despite the consistent media discussion around ESG investing since the US election results, 60% of practices continue to address consumer care for managing ESG factors in their investment decisions. Leading practices have responded by continuing to develop expertise in this area, aligning their service offerings with evolving client values.
Looking Forward
While the profession has made remarkable progress, significant challenges remain. The disconnect between what consumers believe advice should cost and the fees advisers need to charge means advice remains unobtainable for most Australians. The average consumer is willing to pay just $911 for financial advice, while only 6% of advisers offer initial services for under $1,500.
The implementation of QAR recommendations and further DBFO reforms could help bridge this gap by increasing the supply of advice while reducing the costs of running an advice business. However, the profession is caught between waiting for political certainty, actively developing innovative service models, and embracing technology to make advice more accessible.
The ever-growing trend of private equity investment in financial advice practices over the past 3 years shows that there is clear value in the profession, and waiting for politicians to make decisions isn’t the wisest business decision.
The Path Forward
As we approach the election, the financial advice profession stands at a pivotal moment. Regardless of the political outcome, practices that continue to invest in technology, streamline their operations, and focus on client-centric service delivery will be best positioned to thrive.
The past three years have demonstrated the profession's resilience and adaptability in the face of the regulatory waiting game. Rather than being defined by government inaction, financial advisers have taken control of their destiny, building more sustainable, profitable, and client-focused businesses.
The message is clear: while supportive regulation remains important, the future of financial advice in Australia will be shaped more by professional innovation than political promises. The progress made in recent years—evident in rising client numbers, improved profitability, and technological transformation—shows that the profession is charting its own course toward a sustainable and impactful future.
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