Produced in partnership with Colonial First State.
The financial advice gap in Australia is impacting Australians and the advisers who support them. Fewer Australians are accessing the advice they need. Meanwhile, advisers are looking for innovative solutions to help them service more clients.
At CFS, we believe practice management support and continuous improvement of our own platforms can help advisers service more clients.
Last year we partnered with Elixir Consulting for a nationwide study on back-office operations and their impact on the success of financial advice firms. The research of over 171 financial advice firms including 561 advisers across Australia identified a range of strategies that advisers are currently implementing to achieve sustainable growth and profitability.
The result of that research was the Advice Operations Research Report 2024, which identified actionable insights and best practices. It included detailed analysis and recommendations on how to optimise business operations, improve client interactions, and increase overall profitability.
The report recommended paying staff well and aligning bonuses towards business success; separating the role of practice manager so they are solely focused on the overall running of the business and not compromising their time by dealing with client responsibilities; documenting and having a standardised way for employees to follow processes and procedures; and finding business efficiencies through outsourcing to third-party providers where appropriate.
By implementing the strategies outlined in the report, advisers can streamline their processes, reduce administrative burdens, and focus more on client-facing activities. This not only enhances the client experience but also allows advisers to manage a larger client base more effectively.
Critically, the report emphasised the importance of leveraging technology and outsourcing tasks to improve efficiency. By adopting these practices, advisers can free up more time to focus on providing personalised advice and building stronger client relationships.
Building on that research, CFS’s 10X team have launched new initiatives driven by adviser feedback aimed at driving practice efficiency. A recent example of this is our AI masterclass events, in collaboration with Microsoft. By learning about AI and its applications, advisers can enhance their efficiency and productivity, allowing them to manage a larger client base more effectively. The masterclass also fosters a sense of community among advisers, enabling them to share insights and best practice.
Our industry has historically faced challenges in addressing connectivity and efficiency for advisers at a practice level. For example, back in 2011 Investment Trends found that 57 per cent of financial advisers faced challenges with technology integration. Many advisers still face these same frustrations today.
The industry’s traditional reliance on fragmented systems and processes has further exacerbated these issues, making it difficult for advisers to streamline their operations and enhance productivity. As a result, there is a pressing need for innovative solutions that can bridge these gaps and enable advisers to deliver high-quality, efficient services to their clients.
According to the CFS Advice Practice Profitability Report, financial advisers currently manage an average of 110 ongoing clients each but aspire to serve 152 clients if business hurdles are overcome. This increase could lead to 650,000 more Australians receiving ongoing financial advice, raising the total to 2.4 million.
We found that primary users of CFS FirstChoice serve 24 per cent more ongoing clients compared to users of other platforms. They managed to serve 85 per cent of their clients profitably in the last 12 months, despite their new clients having an average portfolio size that is 26 per cent smaller than the industry average.
Over the next three years, 54 per cent of advisers aim to increase revenue per client, and 50 per cent want to serve more clients annually. Enhancing efficiency is seen as a key driver for creating the bandwidth to improve their value proposition and service offering to clients.
The integration capability of FirstChoice, introduced in partnership with Elemnta in November 2023, enables advisers to open multiple accounts simultaneously with secure and simple digital consent, cutting set-up time for new and existing accounts by up to 80 per cent.
To support this, we have launched the FirstChoice Business Optimisation service, a dedicated implementation service for new and existing FirstChoice advisers. Our business optimisation specialists are now visiting practices across the country, helping advisers review their operational setups and identifying efficiency opportunities.
CFS remains steadfast in its commitment to bridging the financial advice gap in Australia. By continuously enhancing our platforms and providing practice management support we aim to empower advisers to serve more clients efficiently and effectively.
Peter Labrie is executive director of FirstChoice at Colonial First State.
