Cracking the code to scaled advice delivery
Strategic technology integration and clearly defined advice propositions are two critical elements for building a successfully scaled advice model, according to Adviser Ratings.
Providing financial advice through a scaled model at a lower price point continues to be a largely untapped opportunity for advisers, the research house described.
Previous Adviser Ratings research shows that while 68 per cent of Australians recognise the benefits of advice, just 6 per cent are willing to pay more than $2,500 annually – the minimum that most advisers would need to charge to break-even through traditional models.
Meanwhile, average ongoing fees charged per client currently stand at $5,500 per annum in 2024, up from a 17 per cent jump from $4,700 last year, according to Investment Trends.
“This disconnect between perceived value and price sensitivity isn’t new. What is new, however, is that some innovative practices are finally cracking the code on profitable scaled advice delivery,” Adviser Ratings said.
A key element of successfully scaled advice structures is strategically leveraging technology and digital tools to reduce manual work without compromising quality, the firm explained.
“Technology integration forms the backbone of their operations, with digital tools driving client engagement, marketing automation and streamlined advice production.
“Successful practices select digital tools that complement their service model, automate routine tasks effectively, and maintain consistent quality control.”
This includes automated data collection and streamlined compliance processes, enabling advisers to focus on the parts of the advice process that requires human interaction with the client, rather than lower-value tasks.
In addition, advice practices that offer scaled advice are narrowing their offerings and have clear boundaries on the range of services they provide, such as through specialisation.
“They develop specific, well-defined advice propositions with transparent pricing that aligns with service delivery costs. Clear communication with clients about service limitations helps manage expectations and maintain profitability.”
This hinges on constructing standardised packages for specific client segments. Clients that do not fit this mass model or require more holistic advice should be referred to another adviser, Adviser Ratings added.
“As the profession continues to evolve, these models offer a promising path to both practice profitability and broader access to professional financial advice for Australians.
“The growing consumer interest in limited-scope advice, combined with increasing industry acceptance of varied service models, suggests that scaled advice will play an increasingly important role in the profession’s future.”
AUTHOR
Jasmine Siljic
Recommended for you
National advice licensee PictureWealth has appointed John Bezich in a newly created role of head of advice.
ASIC has cancelled the AFSL of a Queensland-based advice firm and is aware it had recommended investments that included the now-liquidated Global Capital Property Fund and the Shield Master Fund.
Insignia Financial suffered total net outflows of $1 billion in its first quarterly update for FY25, however reported overall growth in its funds under management and administration.
As Invest Blue looks to quadruple its client base to 60,000 Australians, managing director David Stephen says outsourcing is helping it achieve these growth aspirations and allowing advisers to focus on high-value tasks.
