Insignia Financial is targeting its financial advisers to increase revenue per adviser by 62.5 per cent by 2030.
At the Investor Day in Sydney on 13 November, the firm announced a five-year program to reduce costs and maximise scale and efficiency.
In a presentation, it further broke down the figures that it wants advisers to achieve by FY28 and FY30 across clients per adviser, revenue per adviser and cost to income.
It currently has 110 advisers at Shadforth and 90 at Bridges, having divested self-employed advisers at RI Advice and Consultum ones into Rhombus Advisory in July. During FY24, the advice division achieved $150 million in revenue and has $23 billion in funds under advice across 18,000 client families.
Shadforth is aimed at high-net-worth individuals with $1–5 million, while Bridges will target mass affluent consumers with $300,000 to $1 million.
The firm said the opportunity here is to enact advice technology and process improvements, including artificial intelligence, and benefit from opportunities presented by the Quality of Advice Review which it hopes will reduce the cost of advice and increase demand.
“Adviser production inefficiency is an industry-wide challenge, limiting the reach of each adviser,” the licensee said.
Regarding clients per adviser, Insignia’s salaried advisers currently service 100 clients each and there is an opportunity to increase this to 115–125 by FY28 and as high as 140 by FY30, a 40 per cent increase in client numbers.
Moving onto revenue per adviser, advisers currently report $0.8 million in revenue per adviser and the licensee expects this to increase to $1–1.1 million in FY28 and to $1.1–1.3 million in FY30, a 62 per cent increase.
This revenue increase will be driven by accelerated organic growth via referrals, marketing and new propositions rather than enacting inorganic growth and acquisitions that it might have done in the past. It also wants to grow the number of advisers and reprice its advice book.
Research by Wealth Data earlier this year found the median revenue at listed advice licensees rose 13 per cent from $393,050 in FY23 to $446,480 in FY24 but it is understood Shadforth, in particular, typically generates a higher volume of revenue than other firms.
Finally, when it comes to cost to income ratio, this currently sits at 80 per cent. The firm expects this to reduce to mid-70 per cent and drop below 70 per cent in FY30.
It confirmed all three of these opportunities can be enacted by efficiencies from scale and technology, and it has announced an initiative to invest in advice processes to uplift productivity and experience.
Currently, it takes 20 hours to generate advice per client and involves too many hand-offs and compliance requirements, it said. This can mean the total advice process takes up to six months consisting of fact finds, generating advice, presenting advice to the clients, implementing advice and supervision.
“There is a strong business case across 200 advisers to invest in technology ecosystems and reinvent the advice process to uplift productivity.”
However, while the firm is backing the benefits of artificial intelligence, an enterprise service agreement negotiated earlier this year included clauses to protect workers’ rights in the use of AI to ensure that a human must be the one to make the final call.
