Are advice firms really getting larger? | Australian Markets

Despite ideas that self-licensed advisers and micro-licensees are a fast growing phase of the career, new analysis from Investment Trends has discovered an accelerating shift in the direction of bigger advice practices.

But, both manner, financial advice practices have gotten more profitable albeit that the analysis additionally discovered that ongoing advice charges are considerably larger among the many prime 10% of practices.

The 2025 Adviser Business Model Report produced by Investment Trends means that firms are increasing not solely in adviser headcount but additionally by bringing in-house specialists comparable to accountants and attorneys to broaden their companies and higher tackle growing shopper wants.

Commenting on the report findings, Investment Trends director, Cameron Spittle stated 31% of practices now had more than 5 advisers, and that these bigger firms maintain on average $15 million more in funds underneath advice per adviser in comparison with smaller practices.

“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,” he stated.

The Investment Trends report stated that profitability continued to improve, with more than half of financial advisers (52%) reporting a rise in follow earnings, whereas simply 11% recorded a decline, the bottom degree in a decade.

“Among the most profitable practices, success is underpinned by three key levers: higher ongoing fees, leaner cost structures, and greater use of managed accounts to deliver scale and consistency,” it stated.

“Efficient advice delivery models and disciplined pricing are increasingly separating high performers from the pack,” stated Spittle. “We are seeing a strong focus on operational efficiency that is driving down both operating and advice production costs.”

He additionally famous the trends which had emerged with respect to advice charges and price to serve.

“Ongoing advice fees are significantly higher among the top 20% of practices, far outpacing the average with ‘highly profitable’ advisers charging nearly double the ongoing fees of their peers,” he stated.

“When combined with lean, tightly managed cost-to-serve models, these higher fees are translating into substantially stronger margins.”