Financial Advisory Expansion: Balancing Growth and Regulatory Challenges

3

The information on this website is general in nature and does not take into account your objectives, financial situation, or needs. Consider seeking personal advice from a licensed adviser before acting on any information.

The findings in the Advice Practice Profitability Report suggest that advisors are planning to grow their client portfolios, increasing average client numbers from 110 to 152. With 15,500 financial advisers each potentially onboarding nearly 42 new clients, the projections see the total number of Australians receiving ongoing financial advice climb to approximately 2.4 million.

However, expanding the client base comes with its own set of challenges. Two-thirds of advisers acknowledge hurdles in scaling their practices, with inefficiencies in service provision and capacity constraints being primary concerns. Additionally, ongoing regulatory servicing requirements put extra pressure on advisers looking to extend their reach.

To tackle these challenges, many advisers plan to streamline their operations and cut costs associated with client servicing, while simultaneously focusing on boosting revenue from each client. Over the next three years, 54% of advisers aim to enhance revenue per client, with 50% proposing to increase their annual client load.

Recep III Peker, founder of Empower Business Advisory and author of the report, reflected on these findings in a recent media announcement. He noted, “We explored advisers’ strategic priorities for the next three years and found increasing capacity to serve more clients annually is one of the industry’s top priorities.”

Navigating Capacity Constraints

As government conversations around financial advice reforms continue, there's ambiguity over whether practices will use this additional capacity to lower client fees or increase client intake-if servicing costs drop. A report by Professional Planner disclosed that administration and compliance overheads constitute 56.5% of total advisory costs.

The demand for financial advice is indeed rising, despite its currently high costs, reflecting a keen consumer interest. An October survey by the Financial Advice Association indicated that nine out of ten clients felt the advantages of financial advice outweighed its financial implications.

A recent Professional Planner roundtable shed light on the ethical obligations of financial advisers to improve productivity and cater to growing demand. Discussions pointed out a noticeable reservation among some advisers; they may lack an inherent motivation to scale their client base if their current earnings remain stable with fewer clients.

This mindset could counteract the goals of the Delivering Better Financial Outcomes initiative, designed to reduce bureaucratic red tape and empower advisers to better accommodate their clients, ultimately bridging the existing advice gap.

Published:Wednesday, 20th Nov 2024
Source: Paige Estritori

Please Note: If this information affects you, seek advice from a licensed professional.

Share this news item:

Finance News

Clear

Australian EOFY Car Deals Hit Record Highs in 2025

01 Nov 2025: Paige Estritori

The 2025 End of Financial Year (EOFY) period witnessed an unprecedented surge in car deals across Australia, marking a significant milestone in the automotive industry. According to an analysis by TheBeep.com.au, the number of car deals in June 2025 reached 190, representing a 39% increase from the 137 deals recorded in 2024. This substantial growth underscores the intensified competition among automotive brands striving to clear stock before the June 30 deadline. - read more

EV and Hybrid Vehicle Financing in Australia Reaches $6.17 Billion in 2024

01 Nov 2025: Paige Estritori

The Australian automotive finance sector has experienced a remarkable surge in support for electric (EV) and hybrid vehicles, with financing volumes escalating from $250 million in early 2023 to an impressive $6.17 billion by the end of 2024. This substantial growth underscores the pivotal role of financial institutions in facilitating the nation's transition to low-emission transportation. - read more

Affordable Electric Vehicles: New Low-Interest Loans for Eligible Australians

24 Oct 2025: Paige Estritori

The Australian government has launched a new initiative to make electric vehicles (EVs) more accessible to a broader segment of the population. This program offers low-interest loans to individuals earning less than $100,000 annually, as well as essential workers, facilitating the purchase of new and used EVs priced up to $55,000. - read more

RBA Weighs Additional Rate Cuts Amid Economic Indicators

16 Oct 2025: Paige Estritori

The Reserve Bank of Australia (RBA) is currently evaluating the necessity of further interest rate cuts in light of recent economic developments. Following three reductions earlier this year, bringing the cash rate to 3.6%, the central bank is closely monitoring indicators such as consumer spending and inflation trends to inform its monetary policy decisions. - read more

Navigating Car Loan Approval Timelines in Australia

16 Oct 2025: Paige Estritori

Securing a car loan is a pivotal step for many Australians aiming to purchase a vehicle. Understanding the approval process and the time it takes can help set realistic expectations and facilitate a smoother experience. - read more

Current Car Loan Interest Rates in Australia: October 2025

16 Oct 2025: Paige Estritori

As of October 2025, Australian borrowers have access to a variety of car loan options with competitive interest rates. Understanding the current landscape can assist in making informed financing decisions. - read more

Click for more Finance News