Advisers aim to serve 650k more clients in 3 years: Report

The CFS Advice Practice Profitability Report, produced by Empower Business Advisory and commissioned by Colonial First State (CFS), has revealed that half of advisers want to serve more clients annually (50 per cent) and increase revenue per client (54 per cent) over the next three years.

According to CFS, advisers manage an average of 110 ongoing clients each but are aiming to serve 152. With the number of advisers currently sitting at just over 15,500, according to the latest update from Wealth Data, an additional 42 clients per adviser would see more than 650,000 Australians receiving ongoing financial advice each year, increasing the total to 2.4 million.

It is important to note that the number of clients advisers are actually serving can vary depending on the report. For example, Investment Trends’ 2024 Adviser Business Model report found that the average adviser is managing 99 active clients, those seen once a year, and 41 passive clients.

This finding marked the lowest number of clients per adviser since Investment Trends first conducted this research in 2007, which the firm concluded was primarily a result of fee increases.

As such, the CFS report found that one of the biggest hurdles for achieving this goal is not a lack of demand for advice, rather it’s their ability to “supply it profitably while keeping advice affordable”, with inefficiency cited by advisers as the most common challenge, followed by ongoing servicing requirements and capacity constraints.

The report found that platform choice was a “key influencer” for how many clients an adviser can serve profitably. The firm explained that those with CFS FirstChoice in their platform stack were serving the largest number of clients on average, while also reporting the highest incidence of servicing clients profitably.

The founder and managing director of Empower Business Advisory and author of the report, Recep III Peker, said the research highlighted advisers’ commitment to helping more Australians access affordable financial advice in the near future.

“We explored advisers’ strategic priorities for the next three years, and found increasing capacity to serve more clients annually is one of the industry’s top priorities,” Peker said.

“As part of this, advisers are aiming to simplify their operations and reduce the cost of servicing clients, while seeking to increase their revenue per client as an outcome of delivering greater value.

“Taken together, this shows clear intent to boost advice quality and business profitability while simultaneously getting advice to more Australians.”

Bryce Quirk, CFS group executive of distribution, said this shines a light on the important role of technology providers in helping advisers reach this goal.

“The CFS Advice Practice Profitability Report shows that, on average, advisers who use CFS FirstChoice as their primary platform serve 24 per cent more ongoing clients compared to their peers,” Quirk said.

“The report also confirms preliminary research that found advisers are experiencing a meaningful reduction in client onboarding time when using CFS FirstChoice onboarding powered by Elemnta.

“As a result, we look forward to continuing to work with advisers, reviewing their operational set-up and supporting them in identifying and implementing efficiency opportunities.”

In addition to this new report, CFS also announced the launch of FirstChoice Business Optimisation, a dedicated implementation service helping new and existing advisers “implement the Elemnta onboarding tool and integrate managed accounts to unlock efficiencies”, Quirk said.