Size matters for boutique survival – survey
Boutique dealers will need to have more than 100 advisers to remain profitable, according to a new costs and revenue survey of financial planning dealer groups.
The research, conducted by Dealer Group Advisers, examined the revenue levels of dealer groups generated through adviser fees, platform income, commissions and any additional earnings.
It found that while groups earning less than $100,000 saw a rise in revenue of 3.3 per cent, this equated to just over $3,000 a year in additional profit.
Dealer Group Advisers director Andrew Wheeler said the revenue from a small number of advisers would not cover the fixed costs of running the dealer group.
“People breakaway from the big institutional dealer groups to set up boutiques with 30 to 40 advisers, but to survive with falling revenues, I believe boutique dealer groups will now have to have between 70 to 150 advisers.”
“The belief that a small group can run a low-cost operation and sell it to a ‘white knight’ in a few years won’t happen,” he said.
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