Planners cut advice fees

New research suggests financial planners have once again cut the amount charged for advice in a bid to maintain or increase business profitability.

The average planner now estimates the cost of comprehensive advice for a typical client to be $2,350 - down from $2,600 in 2010, according to the April 2012 Investment Trends Planner Business Model Report.

Furthermore, maintaining a client profile - including the cost of periodic reviews - has fallen by $200 since 2010 to $1,200 per annum in 2012.

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"These improvements, aided by the enhancements planning software and platforms have implemented over the last few years, have allowed planners to cut their advice fees to better batch the needs of the ever-more fee-sensitive investor," said Investment Trends senior analyst Recep Peker said.

However, the averages tell only part of the story, Peker said.

Some advisers are able to provide advice much cheaper, with a number citing that it costs them just a couple of hundred dollars.

"When asked how they estimate this, we generally come across a fairly light infrastructure - home office, no staff, meeting clients at cafes and the like," Peker said.

"Others cite costs around the mid four-figures, often referencing high overheads as a factor, but also the complexity of the advice and the many hours that are put into providing a holistic strategy."

The investment trend highlighted that technology providers now have the opportunity to distinguish themselves by further helping planners streamline their processes, boost integration and bring down the cost of providing advice.

The Investment Trends' report was based on a survey of 1,412 financial planners.

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