Financial Advisory Expansion: Balancing Growth and Regulatory Challenges
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 financial advisory sector in Australia is poised for significant expansion, with the potential to extend advisory services to an additional 650,000 clients.
This promising development hinges on resolving existing regulatory barriers.
A detailed analysis by Empower Business Advisory, sponsored by Colonial First State, underlines this potential shift in the industry landscape.
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.
In a significant development within Australia's auto finance sector, non-bank lender MONEYME has successfully priced a $455.4 million asset-backed securitisation (ABS) for its secured car loan product, Autopay. This transaction marks the company's second major auto bond deal, following a $517.5 million transaction earlier in the financial year, underscoring MONEYME's rapid expansion and growing influence in the market. - read more
The Australian Securities and Investments Commission (ASIC) has recently unveiled findings from its comprehensive review of the motor vehicle finance sector, highlighting concerning trends that are likely to prompt a tightening of lending practices across the industry. The review revealed that nearly half of all consumers who defaulted on their car finance repayments did so within the first six months of the loan term. - read more
In a landmark decision, ANZ Bank has agreed to pay a record-breaking A$240 million (approximately US$160 million) fine for a series of serious regulatory breaches. This penalty underscores the growing emphasis on compliance and accountability within Australia's financial sector. - read more
The Australian Securities and Investments Commission (ASIC) has commenced a thorough review of the motor vehicle finance sector, focusing on strengthening consumer protections and ensuring industry compliance with responsible lending obligations. This initiative aims to address potential risks and improve the experiences of borrowers across Australia. - read more
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
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
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
Welcome to your comprehensive guide on navigating the Australian car loan landscape as a temporary resident. Whether you're here for work, study, or leisure, having your own vehicle can vastly improve your time in Australia. However, securing a loan for a car might seem like a formidable task given your temporary status. That's where this article steps in—to enlighten and empower you in this financial journey. - read more
Embarking on the journey of car ownership comes with its share of responsibilities, one of which is securing affordable insurance. Understanding the intricacies of insurance rates is central to managing this recurring expense effectively. Insurers take into account numerous factors when determining your premium, including but not limited to driving history, vehicle type, and geographic location. - read more
Stepping into the world of self-employment can be a profoundly liberating experience, offering greater flexibility and the potential for financial independence. However, when it comes to securing finance for substantial purchases like a vehicle, self-employed individuals may face unique hurdles. Traditional lenders often favor those with a stable employment history and regular income statements, which can put the self-employed at a disadvantage. - read more
Qualifying for a car loan isn't all that difficult. There are a few key things that lenders will look at when considering your application, including your income, credit history/existing loans, employment, age, and residency atatus. As long as you have a good understanding of these factors, you’ll be in a much better position to qualify for a car loan. Keep reading to learn everything you need to know about qualifying for a car loan! - read more
When it comes to car loans, one of the first things you need to determine is your budget – how much can you afford to borrow and still comfortably make your monthly car loan repayments? - read more
Entering the realm of self-employment brings with it not only the freedom to be your own boss but also unique challenges, especially when it comes to securing financing for significant purchases like a car. For the self-employed, the path to obtaining a car loan can be fraught with additional hurdles, stemming from the variable nature of their income and the scrutiny lenders apply to their financial profiles. - read more
For many Australians, a car is more than just a means of transportation; it's a symbol of freedom, a tool for exploration, and often, a reflection of personal style. With the auto market continually evolving, staying abreast of current trends is key for car buyers looking to upgrade. New models with advanced technology, improved fuel efficiency, and enhanced safety features enter the market each year, making the prospect of upgrading increasingly appealing. - read more
Start Here !
All quotes are provided free and without obligation. We respect your privacy.
Knowledgebase
Compound Interest: Interest calculated on the initial principal, which also includes all accumulated interest from previous periods.