Efficiency bottlenecks hinder client capacity growth

Colonial First State’s (CFS) 2025 Advice Practice Profitability report has revealed advisers are now serving more ongoing clients, however, 82 per cent are still looking to increase their client capacity.

Based on a survey of 413 financial advisers and 102 support staff, CFS’s latest report, developed in partnership with Empower Business Advisory, found that advisers are managing an average of 112 ongoing clients each.

While this marks a slight increase from 2024, which was sitting at 110, it still falls significantly short of the average aspiration of serving 152 ongoing clients.

Although this doesn’t apply to all advisers, with 18 per cent indicating they are currently at their ideal number of clients or are looking at reducing the number of clients they serve, the remainder would like to add an average of 51 clients to their books.

This comes as demand for advice continues to outstrip the supply as a wave of Australians prepare for retirement amid a shortage of financial advisers, with just 15,447 individuals on the Financial Adviser Register (FAR) at the end of September, according to Adviser Ratings’ latest industry report.

According to the report, 42 per cent of advisers said that they or their client services team are operating at full capacity, up from 35 per cent last year, while statement of advice (SOA) inefficiencies and meeting ongoing servicing requirements (20 per cent) were flagged as key contributors preventing them from being able to service more clients.

At the same time, advisers also noted that clients’ inability to afford advice fees and the ability to serve clients profitably was also negatively impacting their ability to serve more clients (14 per cent), though both of these factors showed a slight decrease from 2024.

Not all advisers appear to be struggling, however, with around one in five telling CFS they face no barriers and are actively growing.

Looking at advisers' top business priorities for the next three years, 46 per cent said that increasing their capacity each was a key focus for their business while more than half (52 per cent) want to simplify operations or streamline their back-office administration.

With efficiency top of mind, 52 per cent of advisers said they would want to advise a larger book of clients if platforms were able to help boost their efficiency and reduce the cost to serve, while 45 per cent said they would improve their business model and processes.

As advisers look to enhance their business operations and processes, Empower Business Advisory managing director, Recep Peker, said that many advisers are turning to platform providers to help them achieve this.

“Many see platforms playing an essential role in expanding their operational capacity, and want to partner with those offering robust, consistent processes that give them the confidence to scale sustainably and achieve their growth ambitions,” Peker said.

“Advisers are also looking to reinvest their efficiency gains back into their businesses and clients. Beyond serving more clients, they say greater capacity would allow them to refine their business models and strengthen their value proposition to clients, while also achieving better work-life balance for themselves and their teams.”

CFS group executive of distribution, Bryce Quirk, said: “Advisers want to serve more clients and streamline operations, yet capacity constraints are rising. This highlights a critical dynamic - platform selection is a strategic enabler of growth.”

Earlier this month, Elemnta’s 2025 Adviser Efficiency Analysis found that advisers are spending around 86 per cent of their time on non-advice operations such as compliance, administration and implementation, despite advisers believing this number is closer to 45 per cent. This suggests that advisers themselves are unaware of how much time they lose to non-advice tasks.