Dealer group-aligned financial planning practices earn slightly less per year than those with their own Australian Financial Services Licence (AFSL), according to a Macquarie Practice Consulting survey.
The group surveyed 109 financial planning practices, 40 per cent of which were with a mid-tier dealer group.
The 2011 Financial Planning Practices Benchmarking Survey revealed that for AFSL holders, revenue improved from $0.99 million in the 2009 financial year to $1.08 in 2010, while revenue for dealer group-aligned practices was slightly lower.
Overheads were high across the board, although they made up a slightly higher proportion of revenue for dealer group AFSL practices (53 per cent) than own-AFSL practices (49 per cent)
However, Macquarie Practice Consulting senior consultant Fiona Mackenzie said both maintained healthy gross profit margins, despite the challenges they face.
“With so much attention within the industry focused on the hurdles planning practices have to overcome, it seems that, against all the odds, financial advisers are pushing through these challenges and making positive changes that are impacting their bottom line,” Mackenzie said.
With fee reform on the horizon, the survey also asked participants about what proportion of their revenue was currently made up of fees.
Fees account for around 70 per cent of revenues for practices with their own AFSL, which is up from 57 per cent from three years ago.
“For practices with a dealer group AFSL fees already make up over half of their revenue too,” Mackenzie said.
The survey asked advisers about their sentiment for the first time this year, finding advisers overwhelmingly felt positive about the future, with practices showing resilience and optimism ahead of the upcoming regulatory changes.
