Most advisers see increased costs
Three quarters of financial advisers have found their costs have increased in the last five years, according to Elixir Consulting.
Preliminary findings of the firm’s fourth edition of the “Adviser Pricing Models Research Report” also included the fact that costs had remained steady for 17 per cent of advisers.
The report also found that while the average earnings before interest and tax (EBIT) that advisers were targeting (after a normalised salary to principals of $150,000 per annum) was 35 per cent, the average actually being achieved currently was only 13.5 per cent.
The businesses who were achieving over 30 per cent EBIT averaged 27 new clients in the past year, and the sources of these new clients were through receiving referrals from clients without asking for them, and “referral sources that send clients our way”.
The report also found changes in the way advisers were charging for risk advice, with advisers implementing different techniques.
Elixir Consulting managing director, Sue Viskovic said: “We have certainly found more advisers are charging some iteration of fees for their risk advice, and the numbers of those replacing commissions with fees have lifted from the last report two years ago”.
The firm was still conducting online surveys to compile the report, and said it was looking at issues such as what advisers charged for aged care advice, at what point in the advice process advisers positioning initial and ongoing fees, and what differentiates high profit firms from those not reaching target margins.
AUTHOR
Malavika Santhebennur
Recommended for you
The increased bids for Insignia from Bain and CC Capital value the company at $3.3 billion, while there is still a possibility for competing bids from rival players such as Brookfield.
AMP and Clime Investment Management have shared how they are harnessing the power of social media to help the firms reach a younger demographic and increase brand awareness.
The number of Australian individuals with more than US$10 million in assets has passed 42,000, rising by 3.9 per cent over the past year.
A former Northern Territory financial adviser has received a seven-year ban from ASIC, having been convicted of supplying dangerous drugs and receiving or possessing the proceeds of their sale.
