Planners now charge 10% less for comprehensive advice than they did in 2010, it has been claimed - but that doesn’t necessarily mean financial planners are seeing profits drop.
According to the latest research from Investment Trends, the average planner is now charging $2,350 for the cost of comprehensive advice for a typical client – compared to $2,600 in 2010.
However, the Investment Trends Planner Business Model report claimed this reduction is thanks to cuts in the cost of providing advice, rather than planning practices shaving down their profits.
What’s driving these lower business costs, claimed Investment Trends, is improvements in technology and platforms that are allowing advisers to work more efficiently and lower their fees.
Commenting on the report, Provisio company’s director of scaled advice Cameron O’Sullivan added that the increasing demand for scaled advice will make cost control a vital consideration for financial advisers going forward.
“Advisers are starting to use technology wisely to trim the cost of providing advice, and that is a good thing,” he said.
“But in the vast majority of cases there is still more that can and should be done, particularly to be ready for a forecast increase in scaled advice and fee for service.
“In this environment advisors will need to be able to cover a range of advice requests, while staying profitable.”
He claimed that advisers could streamline their practices further by automating statements of advice (SoAs), for example.
“The extra time to complete the SoA is not adding any value to the client,” he said. “The value for the client is in the strategy, not the processing, which is laborious in many cases.”