Adviser Ratings’ latest report has unearthed which two Australian states are servicing the highest number of clients and enjoying the largest funds under advice (FUA).
The research firm’s Australian Financial Advice Landscape 2024 report surveyed 1,302 advisers, 580 advice practices, and 1,325 Australian consumers to uncover the current state of the profession.
In particular, the research discovered that client growth continues to accelerate each year as adviser exits cause existing advisers to take up a larger number of clients.
Recurring clients per adviser has risen by 17 per cent, from a low of 83 in 2020 to 97 in 2023. Once-off clients account for 25 per cent of an adviser’s client base, while recurring clients make up the remaining 75 per cent.
Breaking down the data for each state, Adviser Ratings found that South Australia and Western Australia are the two states with the highest number of recurring clients in 2023 at 104 and 102 respectively.
NSW followed with 97 recurring clients, ACT and Victoria with 96 each, Queensland with 94, and Tasmania with 93. Data for Northern Territory was unavailable, and the national average was 97 recurring clients.
| State | Recurring clients per adviser |
| South Australia | 104 |
| Western Australia | 102 |
| NSW | 97 |
| ACT | 96 |
| VIC | 96 |
| QLD | 94 |
| Tasmania | 93 |
Source: Adviser Ratings, June 2024
The report also examined FUA which rose with financial markets last year. South Australia and Western Australia again took the top two positions for highest FUA in 2023 at $95 million and $94 million respectively.
In third place was NSW at $89 million, followed by Victoria at $88 million, Queensland at $85 million, Tasmania at $83 million, and ACT at $82 million. The national average for FUA was $89 million.
| State | Funds under advice |
| South Australia | $95 million |
| Western Australia | $94 million |
| NSW | $89 million |
| VIC | $88 million |
| QLD | $85 million |
| Tasmania | $83 million |
| ACT | $82 million |
Source: Adviser Ratings, June 2024
“With renewed certainty about the future of the advice profession, practice growth is a top agenda item for most practices in the next 12 months,” the report stated.
Over 80 per cent of advice businesses are looking to grow their client load, while 15 per cent are content with their current book.
Of those planning to expand their practice, two-thirds are targeting a specific type of client to narrow their specialisation and improve profitability, such as certain types of professionals or high-net-worth (HNW) investors.
“This has been a recurrent theme in the past few years, as businesses respond to high client demand by becoming more targeted in their growth strategies.”
What fees are practices charging?
The report reaffirmed the rise in advice fees due to the increasing cost of providing advice. One main contributor has been the increasing regulatory burden, it stated, with advisers having to dedicate additional time to ensure advice documentation meets compliance requirements.
The median adviser fee grew by 7 per cent to $3,960 per year. This figure is up by 58 per cent from 2018, when the median fee was $2,510.
“We expect this trend to continue, as inflation and higher interest rates have pushed up costs for advisers.”
However, there is a substantial difference between the reality of fees being charged and consumers’ willingness to pay a certain amount. Adviser Ratings found that consumers are open to paying an average of $911 for receiving advice.
This figure falls even further to $553 when only considering those who don’t have an adviser. Just 6 per cent of advisers charge fees for new clients below $1,500.
