As financial advice evolves into a profession, significant changes have emerged in the profile of the average Australian adviser. Insights from our latest 2024 Landscape report reveal these transformations based on the collection and analysis of detailed demographic data to create a portrait of the typical Australian adviser and their business, including their client base, fees, insurance, software, platforms of choice, and sources of research.
Your average industry peer is now slightly older, privately licensed, and earning slightly less than they were a year ago. Some more key points are:
- Fees continue to rise: The median fee rose to $3,960, up 7% from the previous year. This trend is expected to continue as advisers contend with higher interest rates and inflation, despite efficiency gains. The median advice fee is now up 58% from five years ago.
- Average adviser salaries have slightly decreased: The average adviser salary has not kept pace with inflation and has dipped to $140,000 from $145,000 last year.
- Advisers are managing more clients: The average adviser is now seeing 97 recurring clients and 129 overall clients, accelerating up from 91 last year. This reflects a 17% increase from the 2020 low of 83 clients, reinforcing the technology efficiency gains to help serve clients.
- Demand for one-off advice remains high: One-off clients now make up 25% of the adviser’s client base. Many of these clients are seeking specialist or piecemeal advice, and some are testing the waters before committing to full advice.
- Funds under advice have surged: The FUA per adviser has steadily risen each year. In 2023, the FUA per client grew notably as financial markets increased. A more than 20% rise in global equities played a key role in this overall increase in FUA.
- Platform and investment choices have evolved: Advisers are increasingly embracing passive management strategies and the use of ETFs. There is a notable decline in heavily actively managed allocations, down from 65% two years ago to 59%
- Advisers continue shifting towards independence: The trend toward privately owned and independent licensees (AFSL) continued, with advisers leaving larger, diversified practices. The biggest segment is now privately owned licensees with less than 10 staff. In the final quarter of 2023, 57% of new Australian financial services licences were applications from single advisers, reflecting a desire for greater control and flexibility in their practice.
- Your typical client profile remains the same: Although advisers are seeing more clients, the type of client has remained consistent – typically a couple in their mid-50s focused on building super and retirement.
Looking Ahead
The financial advice industry is poised for continued evolution. With a stabilising number of advisers and growing client demands, the focus is ever-shifting towards efficiency and innovation. Technology will play a crucial role in helping advisers manage their increasing workloads and deliver more personalised services. We anticipate a steady rise in both adviser fees and salaries as the industry adapts to meet these new challenges. The emphasis will be on creating sustainable practices that balance the needs of clients with the professional growth of advisers.
Source: 2024 Australian Financial Advice Landscape Report
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