Laid out in its recently released 2025 Adviser Business Model Report, despite fears surrounding the falling numbers of advisers, many firms continue to increase adviser headcounts as they look to expand – including adding more in-house specialists such as accountants and lawyers.
According to Investment Trends, this helps firms to broaden their services and “better address growing client needs”.
Speaking with ifa, Investment Trends CEO Eric Blewitt highlighted that as many advisers continue to aim for high-net-worth clients, their expectations of what an adviser can deliver grows.
“There are some trends that are seeing an increased level of complexity, for example, with retirement, estate planning and intergenerational needs. While these needs have always been there, the expectation that the practice can cater to all needs has been increasing,” Blewitt said.
Increasing, too, are the number of advisers per practice, with most firms now employing more than two client-facing advisers.
“Thirty-one per cent of practices now have more than five advisers, and these larger firms hold, on average, $15 million more in funds under advice per adviser compared to smaller practices,” director at Investment Trends Cameron Spittle said.
“Despite their larger footprint, efficiency remains a challenge. Smaller practices continue to grapple with compliance burdens and regulatory uncertainty, while larger practices are more focused on resourcing and technology integration to scale effectively.”
Data in the report shows that since 2023, firms that are employing more than five advisers continue to grow. Making up 26 per cent of firms in 2023, the jump to 31 per cent highlights the continued growth of larger firms.
Though they always made up the smallest cohort, firms with only one client-facing advisers continue to decline, with it dropping 8 percentage points since 2023 (22 per cent to 14 per cent). Firms with two or more advisers now make up 86 per cent of firms.
Profitability also continues to improve, according to the report, with more than half (52 per cent) of advisers reporting a rise in their practices’ earnings and just 11 per cent recording a decline.
According to Investment Trends: “Among the most profitable practices, success us underpinned by three key levers: higher ongoing fees, leaner cost structures, and greater use of managed accounts to deliver scale consistency.”
Spittle echoed this sentiment, highlighting that efficient advice delivery models and “disciplined” pricing are key operating features in the top 20 per cent of performers.
“We are seeing a strong focus on operational efficiency that is driving down both operating and advice production costs.”
Satisfaction with licensees has also shown a rebound, with net promoter scores rising from +1 per cent in 2024 to +11 per cent in 2025. Simultaneously, advisers are continuing to rely on licensee support.
Self-licensed advisers are more often outsourcing compliance and audit functions, while licensed advisers are still relying heavily on the licensee for supporting and paraplanning.
“The NPS rebound is encouraging, but it’s not the full story,” Spittle added. “Advisers are still calling for genuine support, and current outsourcing patterns reflect this. Licensees that adapt to these shifting needs will be best positioned to strengthen advocacy and retention.”
Still no place for insurance specialists here by the look of things. Wake up people, the margins in risk advice are approaching 30%. Practice owners ignore this at your peril.