Average client book hits 120 as adviser numbers dwindle

According to the latest Investment Trends Adviser Technology Needs Report, the number of financial advisers in Australia has continued to trend downwards in recent years, citing the May 2023 Financial Advisers Register (FAR) figure of 15,700 advisers.

In conjunction with this, the average number of active clients per adviser has risen to 120, which has increased from 113 a year ago.

“The average number of clients serviced by any single adviser appears to be (slowly but surely) approaching Dunbar’s cognitive limit,” said Dr Irene Guiamatsia, head of research at Investment Trends.

“This renders considerations of scale, digital engagement, and the broader role of technology more pertinent than ever.”

The report also found that advisers are embracing technology at an ever-increasing pace, with more advisers than ever satisfied with the tools to which they currently have access. There are also many willing to pay extra for access to tools, the report said, particularly those related to retirement planning (32 per cent) and cash flow modelling (31 per cent).

“There is no subsiding in the interest advisers express for seamless data transfers between the various systems they use,” said Dr Guiamatsia.

“While the focus remains on traffic between planning software and investment platforms, there is also substantial demand for integrations with bank accounts, trading tools, and appointment scheduling software – all of which can support advisers in meeting this growing client demand.”

Investment Trends added that in terms of platforms used, the past year has seen advisers consolidate their tech stack. According to the report, 43 per cent of advisers now only use two platforms (up from 32 per cent in 2022).

It also found that advisers said good online functionality and low cost were the features they most paid attention to when assessing suitable platform options.

“Despite the consolidation that has occurred, 12 per cent of advisers remain open minded about alternative platform solutions,” said Dr Guiamatsia.

“Platform providers therefore have every interest in seeking to better understand what advisers are looking for and offer an appropriate solution that’s going to best help them, help their clients.”

For the first time, the report also looked at advisers’ self-assessment of how well their practice prepared for cyber incidents, as well as potential applications for generative AI tools such as ChatGPT. Advisers were mostly welcoming of generative AI tools, with 11 per cent expecting a “very positive” impact and another 44 per cent expecting a “positive” impact.

“Advisers with a positive outlook of the role of AI see quick wins in the areas of research/modelling, data analytics, reporting, but also cyber security. These are all areas mentioned to a much greater degree than digital advice is,” added Dr Guiamatsia.