18 pc jump in ongoing advice fees significantly outpacing inflation: ARdata

The median ongoing advice fee has increased 18 per cent in 2025, reaching $4668, with the total increase over the past five years hitting 67 per cent according to Adviser Ratings.

In the 2025 version of the Australian Financial Advice Landscape report, the researcher said this outpaces the 20.5 per cent inflation rate over the same period.

“This pricing evolution reflects both the increased cost of delivering compliant advice and the shifting value proposition as advisers focus on more complex client needs and higher-value services,” the report said.

Median ongoing advice fee increases

The average Australian adviser is 52 years old and earns a $145,000 annual salary, while the average practice is privately-owned, with 2.6 advisers making over $500,000 in average revenue.

The total average client base per adviser is 131, which is made up of 101 recurring clients and 30 one-off clients, while funds under advice has increased 11 per cent in 2025 to $758,362.

“This increase reflects a maturing profession that has found equilibrium after years of disruption through implementing the [Hayne] royal commission, professional standards, and Covid-19 from 2018 to 2020,” the report said.

Practice revenue continues to improve, with 83 per cent reporting an increase and 41 per cent achieving revenue growth exceeding 15 per cent (only 35 per cent did in the previous report), while only 3 per cent experienced revenue declines.

Half (51 per cent) of practices achieved profit margins of 20 per cent or more, slightly up from 47 per cent of practices last year, but there are challenges for single-adviser practices with 19 per cent reporting no profit.

The report said practice size is a better determinant of profitability with solo practices averaging $607,000 in revenue while practices with five or more advisers average $5,143,000 in revenue.

Only 10.4 per cent of advisers are planning to leave the profession, down from 25.6 per cent in 2021.

The proportion of Australians seeking professional financial advice has remained stable over the past four years (10.4 per cent), but there are still 3.59 million over 65 not getting advice and 2.56 million between 55 and 64.

Most advisers (55 per cent) meet with clients annually, with only 5 per cent maintaining quarterly engagements.

Practice staffing has also remained relatively stable with an average of 2.6 advisers per practice on average, a slight increase compared to the 2.5 in the previous two years. Firms had 1.57 customer service/administration staff and 0.61 paraplanning staff on average, further decreasing from last year.

The staff-to-adviser ratio has shifted, the report noted, with an 8 per cent reduction in administrative support and a 9 per cent reduction in paraplanning resources due to increased usage of outsourcing and offshoring, better technology and increasing productivity.

Some 40.5 per cent of practices are planning to increase adviser numbers, but organically; 39.3 per cent aim to maintain their current size, while 0.4 per cent plan to downsize.

Around 85 per cent of advice practices are actively pursuing growth strategies, andthere is a continued preference for purposeful growth by targeting specific client types (57 per cent), rather than the reactive approach of accepting any client (28 per cent).

Referrals continue to be the most effective way to gain new clients and 81 per cent cite existing clients as the best channel (up from 71 per cent), followed by accountants (45 per cent).

Family and friends account for 27 per cent while digital channels are sourcing referrals for 19 per cent of practices (slightly up from 16 per cent last year).