The active client base of the typical financial advice practice is continuing to decline, affecting profitability, according to new Investment Trends research.
The 2018 Planner Business Model Report found that in the past 12 months the average financial adviser lost 35 active client relationships and gained only 20.
Fifty-three per cent of the 899 advisers surveyed for the report said the shrinking client base had taken its toll on their practice's profitability growth.
However, the vast majority (69 per cent) of advisers are looking to actively grow their client book, according to Investment Trends research director Recep Peker.
"Despite challenging business conditions, the average planner intends to expand their client book, and support from their licensee, technology and service partners will be more critical than ever to alleviating their top challenges," Mr Peker said.
On the topic of FASEA, two-thirds of advisers believe the education reforms will be a "positive structural transformation" for the industry.
Twenty-five per cent of advisers believe the professional standards and educational framework set out by FASEA will have a negative impact on the industry.
"The younger generation of planners are, in fact, more positive towards these FASEA led reforms," said Mr Peker.
Finally, the move to self-licensing is continuing, with 20 per cent of advisers saying they have their own AFSL – twice as many as in 2012.
"While self-licensed planners brought in a higher level of new inflows over the last 12 months, fewer report annual practice profit growth compared to their colleagues in the wider planning market (47 per cent versus 54 per cent)," said Investment Trends.
"In addition, the vast majority (78 per cent) seek external assistance with a range of business support needs that they are willing to pay for, especially around SOA build, compliance and client engagement."
Mr Peker added, "These unmet business support needs represent a significant opportunity for service providers to expand their proposition to support the growth of self-licensed planners."
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