No let-up seen in one-off advice clients
High numbers of clients are seeking one-off advice, according to Adviser Ratings.
With the economic developments and financial support packages in COVID-19 such as JobKeeper and early access to superannuation, the number of clients seeking one-off advice rose from 15% pre-2020 to around 30% in 2022.
The firm’s Adviser Landscape Report 2022 found the average adviser had 88 recurring clients and 27 one-off ones.
However, while this had been expected to tail off once the pandemic recovery began, Adviser Ratings noted there had only been a 1% fall.
The firm questioned whether this meant advisers were discarding lower-value clients in favour of one-off ones who could become recurring ones.
“The rationalisation of client books has allowed advisers to continue to take on clients in a more limited capacity. In some cases, practices are discarding lower-value clients and, in turn, finding new capacity for one-off clients, whom they hope to turn into ongoing business.
“The shedding of unprofitable clients has been a multi-year trend, which is likely to continue as long as advisers and practices face their current cost and regulatory burden.”
While adviser numbers had been falling, dropping below 16,000 for the first time in 2022, the average number of clients per adviser had risen.
“Again, this is propelling practices to cycle through – or orphan – clients who don’t match their goals. In some cases, these clients can use their super fund’s advice; in other cases, they end up joining the growing army of Australians with unmet financial advice needs.”
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A model I adopted in 2009. but now I am convinced QAR will be the death of that. .... Advisers are not the ones getting the carve outs.
Did the survey identify whether any of the low fee paying clients that were offloaded became one off advice clients?
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