Profits on the rise for advice practices in 2025

Ahead of the release of the 2025 Australian Financial Advice Landscape report, Adviser Ratings said an early analysis of the data showed that 41 per cent of advice practices have managed to achieve revenue growth exceeding 15 per cent, up from 35 per cent last year.

Furthermore, 51 per cent of practices are now reaching profit margins of 20 per cent or more, up from 47 per cent in 2024.

Overall, the findings painted a positive picture for the profession, with 84 per cent of practices reporting an increase in their revenue, while just 3 per cent saw a decrease.

Looking at what is driving this, Adviser Ratings explained that while strong demand for service is a contributing factor to this overall growth, the correlation between revenue and profitability is “particularly stark”.

For example, Adviser Rating said practices with revenue between $1.5 million and $2.5 million showed “remarkable financial health”, with 46 per cent of these practices reaching profit margins of 30 per cent or more.

On the other end of the scale, of practices generating less than $250,000 annually, 58 per cent reported no profit whatsoever.

Looking deeper at what practices are doing, the data found that 85 per cent of practices are actively pursuing growth, however, more than half (57 per cent) are taking a more strategic approach to their growth.

In particular, firms have become more selective when it comes to the clients they work with, preferring to target specific demographics rather than simply accepting anyone who walks through the door.

Notably, this trend was even more pronounced among larger practices, with 80 per cent of those with five or more advisers taking the targeted approach to client acquisition, compared with 54 per cent of solo practitioners, allowing them to focus on building efficiency through specialised services.

“This specialisation is reflected in practice focus areas, with retirement and superannuation, life insurance, and investment management emerging as the top three areas of expertise practitioners actively communicate to clients they specialise in,” Adviser Ratings said.

“This targeted approach allows practices to build a reputation and referral networks in specific niches while maintaining operational efficiency.

“The path to profitability is clear: strategic focus, technological innovation, and professional business management are the hallmarks of today’s most successful practices. By adopting these approaches, more firms can join the ranks of Australia’s financial advice profit powerhouses.”