Lowering the cost to serve

How FirstChoice is helping advisers service more clients

- 01:Peter Labrie

Australia's financial advice industry is star-ting down the barrel of an enormous opportunity: the chance to deliver ongoing advice to more than 650,000 Australians while also dolling out one-off advice to many, many more.

As individuals, the nation's 15,500 financial advisers currently work with about 110 ongoing clients, but research conducted by Colonial First State (CFS) and Empower Business Advisory shows they want to serve more, with 152 ongoing clients apparently the sweet spot. This would mean servicing close to 40% more clients; imagine that – 2.4 million Australians experiencing the transformational power of financial advice.

But there's just one, big problem standing in the way of these ambitions becoming reality - every single day advisers are faced with many smaller challenges that collectively form an unyielding roadblock to increasing capacity and profitability.

In large part, they relate to the overwhelming compliance burden. Two-thirds of advisers say inefficiencies in generating Statements of Advice and Records of Advice, completing regular client reviews, managing fee consents and other elements of the advice process are their biggest hurdles. Others say it's primarily capacity constraints and bottlenecks created in specific areas that are holding them back, while some 32% said it comes back to clients' ability to afford advice or the practice's ability to service clients profitably.

As we know, particularly from the Quality of Advice Review and all the discussion around the Delivering Better Financial Outcomes reforms, the affordability piece is key here. So long as cost remains a barrier to access, the advice gap where only those who can afford it get it while those who need it most can't - is only going to widen.