Hybrid advice key to tackling capacity hurdle

As adviser-client relationships stabilise, Investment Trends’ 2025 Financial Advice Report said digital hybrid advice models are key to addressing the supply-demand gap in Australia.

Based on a survey of 7,549 Australian adults, the annual report found that satisfaction and advocacy among advised Australians rose in the past year however, accessibility of service continues to be a challenge.

As it stands, there are 15.9 million Australians with unmet advice needs. With an advice population of just 15,429, according to Padua Wealth Data’s latest weekly update, there simply are too few advisers to meet the overwhelming demand.

The imbalance will likely become even worse as the number of advisers declines amid the education requirements deadline which comes into force at the end of the year.

Notably, Investment Trends found women are slightly more likely to be missing out on advice with 8.1 million women going without advice, compared to 7.8 million men.

The research also showed that adviser-client relationships stabilised over the last year with new client growth “outpacing client attrition” marking a reversal of a previous downward trend in the number of Australians receiving financial advice.

This comes as many advisers find themselves at capacity, according to Colonial First State’s (CFS) 2025 Advice Practice Profitability report, making it even more difficult for would-be clients to access the service.

The CFS report revealed that this is a key issue for advisers with more than eight in 10 (82 per cent) looking to increase their client capacity, with advisers now managing an average of 112 ongoing clients each. Although this marked a slight increase from 2024, which was sitting at 110, it still falls significantly short of the average aspiration of serving 152 ongoing clients.

Recent years have seen the emergence of increasingly advanced technology to help advisers address efficiency challenges, while some advice businesses have also started looking to digital and AI-powered tools to address the gap.

Investment Trends said these tools often cover budgeting, managing cash flow, tracking and managing super investments, and adjusting super settings, with these offerings mostly being used to learn or plan rather than make financial decisions, “reinforcing that trust and human oversight remain central to effective advice”.

With no shortage of demand, Investment Trends head of research Julian Cappe said improving access is the key focus now.

“Cost remains the single biggest barrier, and Australians are telling us they want guidance that is simpler, clearer and more affordable. The opportunity for the industry now is to reimagine advice delivery models so they meet people where they are, helping to close the gap and ensure long-term sustainability for the sector.”

Cappe added: “Digital tools are transforming how Australians begin their advice journey. They’re helping people take control and build confidence – but technology alone can’t replace human judgement. The firms that succeed will be those that blend digital capability with trusted expertise to deliver guidance that’s both accessible and personal.”

As trust continues to be a major priority for clients, Cappe said advisers who can deliver this can capitalise on it as a “true differentiator in a market where confidence and relationships matter more than ever”.