Angus Woods

Over one-third of advice practices actively plan to take on more clients but it will most likely be at the expense of less profitable ones.

According to findings from the latest Adviser Ratings ‘Landscape Report’, these practices are clear on the type of clients they’ll recruit.

Adviser Ratings founder Angus Woods tells Professional Planner the client take-up comes off the back of practices that have spent the last few years finding partnerships or otherwise consolidating their business through scale.

“They already have the efficiencies in place to bring on more clients,” Woods says.

“When you peel back the data, they’re the types of practices that have done the hard yards over the last 12 to 24 months either through technology efficiencies and/or partnering with other practices and have more capacity.”

While the orphaning of clients is still happening, although it has slightly stalled, practices are showing a willingness to lose clients that aren’t profitable, Woods says.

“A lot of practices are taking on new clients, but they’re still jettisoning their non-profitable clients and that’s an ongoing theme we’re seeing,” Woods says.

The report found process efficiency is the top priority for almost all advice business and most practices feel they are on top of compliance, reporting a sharp year-on-year drop when it comes to seeking help in that area.

Additionally, adviser-to-staff ratio has increased significantly with businesses reducing their spending on outsourced paraplanning.

“The outsource versus insource paraplanning took a shift back to insourcing,” Woods says.