Struggling boutiques turn to risk
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Boutique financial planning practices are focusing on broadening their services and achieving organic growth at the same time as writing more risk, according to new research released by Macquarie.
Macquarie Practice Consulting’s 2010 Boutique Practice Benchmarking study found that average funds under advice for boutique firms had fallen 26 per cent in the past two years to $136 million and that because insurance had been identified as a solid opportunity, the proportion of revenue received from insurance had increased.
It said 43 per cent of firms had revealed they generated more than 10 per cent of their revenue from risk during the past year, indicating this was likely to be an area of future growth.
Commenting on the latest study, the head of Macquarie Practice Consulting, Liz McCarthy, said it highlighted a number of key challenges being confronted by boutique firms.
“Boutique financial planning practices have faced a number of challenges during the past 18 months; revenues have dropped significantly and attracting new clients has been a particular struggle,” she said.
McCarthy said, as a result, many of the firms have been looking at ways to diversify their income and increase their focus on other services.
AUTHOR
Mike Taylor
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