Advisers still struggling with scaled advice

Few advisers are looking to base their business on scaled advice since pricing it in any valuable way is still difficult, according to business coach Elixir Consulting.

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by Miranda Brownlee - October 03, 2014 5 comments

Elixir managing director Sue Viskovic told ifa she has not seen a large number of advisers able to determine a scaled advice model for their business.

“The challenge for so many advisers is that when they look at providing scaled and scoped advice it's single-offer, single-issue advice and it’s very difficult to price it in a way that’s valuable to the client and not a cost to the firm,” Ms Viskovic said.

“I’m tending to see advisers help people understand how to do it themselves using the internet,” she said.

The perception that only the large banks and institutions can deliver an appropriate scaled advice model, she said, is to some degree true.

“They have the scale and will still profit from the small amount of funds under management they generate from clients,” she said.

Practice principal of Meridian Wealth Paul Dunn disagrees, however, having established a profitable scaled advice model for his self-licensed botuique business.

Mr Dunn said advisers can still make a profit from scaled advice when dealing with insurance because there’s always brokerage involved.

“Using risk commissions to offset advisory fees can ensure that clients are receiving the right advice for their circumstances with the adviser getting paid for providing that advice,” Mr Dunn said.

In many cases scaled advice also “opens up the other avenues for more services down the track”, he said.