Steep rise seen in advice fees
Fees for ongoing advice have risen 33% in a year, according to Padua research.
The firm said initial advice fees charged by advisers on a per advice document basis increased from $2,859 in FY21 to $3,315 in FY22 – an increase of 16%.
Ongoing advice fees charged by advisers on a per advice document basis rose from $3,656 to $4,865 over the same period, a 33% increase.
Padua’s annual Advice Fee Data Report surveyed advisers using Padua’s software and services.
Anne-Marie Esler, co-chief executive at Padua, said: “The mass exodus of advisers from the financial advice industry has only exacerbated existing concerns around the cost and accessibility of advice.
“If we as an industry don’t work towards reducing the cost of providing advice, it will become increasingly inaccessible for most people, and especially those who would potentially stand to benefit most from financial advice
The firm said using technology could lessen this cost by generating a Record of Advice in 15 minutes for $125 and simple Statements of Advice for $250 in 30 minutes.
This could help to improve the accessibility and affordability, proposals put forward by the Quality of Advice Review.
Matthew Esler, co-CEO, said: “These are important proposals, but we also believe the cost of running an advice business - and therefore the cost of financial advice to the end user - can already be reduced today by finding the right technology partner. Automating as much of the technical components of providing financial advice should be viewed as a priority in the future viability of the advice industry”.
AUTHOR
Laura Dew
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And what about the huge costs of PI insurance??? That cost is added to the total cost of doing business as a FP and the end comsumer pays for this huge impost as well
Note to Anne Marie, its not up to us to reduce fees, its up to government to reduce the regulatory cost. It seems this research was done in kahoots with an IT company to flog the "need to adopt the right technology" (Sic)
All those who said advisers needed to be more professional (like solicitors and doctors) can now shout for joy. Their dream has come true.
Very true - but I seem to recall you being one of them calling for non-aligned Advice? I still remember you trying to educate me that it was OK for Industry Super to recommend just Industry Super (as they had that at the front door) but not AMP planners?
hell no, it definitely was not me ! the whole industry is a shambles, I am NOT a fan of industry super funds !