The average adviser has seen a salary increase, while the average advice practice makes a 21 per cent profit margin, according to Adviser Ratings.
The researcher’s 2024 Advice Landscape report found the optimal advice practice has a 40 per cent profit margin, but Adviser Ratings managing director Angus Woods said these firms also tend to have over $1 million in revenue.
Woods said the data shows businesses with more women in them are more successful financially.
“The more females you have in your practice and a female adviser is more profitable and runs a better business than a male adviser,” Woods said in a webinar on Tuesday.
The research found the 15,589 individuals on the ASIC Financial Adviser Register are advising on $1.4 trillion in assets for 1.89 million Australians.
The average yearly practice revenue is under $500,000 and a 21 per cent profit margin, which Woods said has translated to higher salaries.
“Advisers are being paid more,” Woods said. “They’re making more money than they ever have been.”
The average adviser is 52 years old, makes $140,000 in salary, is degree qualified, and prefers model portfolios and listed investments.
Woods said the average age has gone up slightly due to some advisers coming back to the industry along the experience pathway.
“Some of the younger advisers have found it a little more challenging creating their own books, getting value and have gone into other industries, believe it or not,” Woods said.
“While there has been an exodus, probably around 2018/2019, of the older adviser demographic on the back of the FASEA requirements, the age of an adviser has stabilised.”
The typical client is 58 years old and paying an annual fee of $4300.
“The typical client is still pre-retiree, understanding what to do in terms of coming into that retirement age,” Woods said.
“The average fee has gone up another 8 per cent this year. Clients are paying more and are willing to pay more, but it’s now about building super and preparing for retirement as the demographics change.”
The the average funds under advice (FUA) for an adviser is $89 million, while the practice average is $225 million.
The average number of clients served per adviser is 129 – an approximately 7 to 8 per cent increase, according to Woods – which is made up of 97 recurring and 32 one-off clients.
“Advisers have been bringing in new clients over the last 12 months after a period of consolidation where they have been divorcing clients,” Woods said.
The most-commonly used practice vendors are Xplan for software, BT Panorama for platform, TAL for insurance and Lonsec for research.
“Always a big challenge between Lonsec and Morningstar for the battle of the adviser,” Woods said.
“Lonsec are making significant inroads in terms of usage or penetration within the advice segment.”
Since the Hayne royal commission there has been a shift towards more self-licensed and micro AFSLs, with AR data previously outlining how disjointed the licensee landscape has become.
“Small licensees have been growing, the licensee segment at that end of town has been burgeoning and will continue to grow,” Woods said.
