The dynamic of too many clients and not enough advisers has encouraged a growing number of firms to invest additional time and effort ensuring they’re taking on only clients that fit the profile they’re looking for.

For many, this can mean a two- to four-meeting screening process, but the benefit down the track of getting the process right is worth the investment.

Charles Badenach, the Hobart-based principal of Main Street Financial Solutions, says if new clients do not fit their “ideal”, they are referred to an alternate adviser to better suit their needs.

The process begins with a few phone calls and three to four meetings, to determine the right fit, with the best clients usually those referred through trusted networks, Badenach says.

“From our experience you no longer compete with other advisers for work, the dynamics have changed from 20 years [ago] so, now the relationship more closely resembles that of other professional service providers such as lawyers and accountants,’’ he says.

“Referred clients are the best source of new business as they generally have been referred by someone who knows and understands first-hand the benefit that financial advice can bring.”

With a current minimum initial adviser service fee of $5,500, that cost is rising every year under the continued heavy compliance burden, Badenach says.

“What this has meant is that the cost of seeing a financial adviser is cost prohibitive for many Australians and, for advisers, some clients are simply not worth the ‘risk’ of helping given the limited upside and significant downside risk,’’ he says.

Badenach says the firm has been focused on technology to reduce its cost to service a client which was “an evolving journey with no end point.’’

“We started this journey when Main Street opened in 2014 and this has continued from simple innovations such as an online diary, to the failed artificial intelligence statement of advice provider Nod, to online cash portals, managed accounts,’’ he says.

While there have been some false starts, he expects artificial intelligence to provide future solutions.

“The world of artificial intelligence is something we are watching closely as we believe this has the potential to be transformative for the industry,’’ he says.

Rising costs of living has also become a factor for Brisbane firm FutureGen Solutions’ onboarding process, says its director and lead adviser Murray Wilkinson.

“In tighter economic times the decision-making process becomes more elongated given financial planning advice and the associated fees are viewed as a ‘discretionary’ spend,’’ he says.