Research exposes adviser pricing models

Financial advisers are only achieving 13.5% in earnings - way below 35% targets, proving there is more confusion and curiosity about adviser pricing models than ever, preliminary results from Elixir Consulting research found.

The study examined six different business models and the implications of charging different types of fees such as engagement and ongoing fees based on a survey of 320 advice practices.

Managing director Sue Viskovic said: "Whilst pricing is often talked about, the intricate detail of how advisers charge for their services is still elusive to most; today it remains a very private and commercially sensitive topic."

Early findings show 75% of advisers' costs have increased in the last five years, while 17% have stayed about the same.

More advisers are also charging some iteration of fees for risk advice, and those replacing commissions with fees have also increased since the last report released two years ago.

The recently launched full report will provide up-to-date figures, detailing what is causing costs to increase and techniques on how to reduce them, Viskovic said.

"Pricing financial advice has always been complex, and when you add in a deep-dive to pricing insurance advice, with all of the variables we found used by advisers, it's been no small feat to interpret the data into a piece of work that will be incredibly helpful for every adviser wanting to determine or refine their own pricing model," she added.

Read more: ResearchElixir ConsultingSue Viskovic
Editor's Choice
About three-quarters of Australian institutional investors are incorporating environmental, social and governance factors in investment decisions.
Businesses looking to integrate enhanced technological capability must consider its future impacts, or else risk creating a greater trust deficit in the financial services industry.
A comprehensive review of Praemium chief executive Michael Ohanessian's termination and subsequent reinstatement determined the previous board acted inappropriately and unreasonably.
Advisers will soon have access to Challenger's deferred lifetime annuities through Colonial First State platforms.
Brought to you by
16 MAY 2017
It was over 30 years ago when Apple released the first Mac. Over that time, Silicon Valley has been the epicenter of technology advancement for the world. That's why the Netwealth group chose this location ...
Get it Daily
Keep up to date, don't be the last to know! Get the Financial Standard Daily Newsletter.
Pocket investment guides featuring adviser case studies and a glossary.
Investing trends and strategies from the industry’s thought leaders.
Putting the spotlight on investment products that matter.
Expert Feed
Michelle Baltazar
A case for digital activism
The time is ripe for financial advisers to embrace their role as digital activists - fiduciaries who are early adopters of finance ...
Emma Rapaport
Smashed on university fees, smashed on retirement
Since Scott Morrison's pre-budget announcement that debt would be reclassified as 'good' or 'bad', the government spending spree has ...
Christopher Page
The next generation
On March 20, David Rockefeller - former Chase Manhattan chair and last of Standard Oil founder John D. Rockefeller's grandchildren ...
Michelle Baltazar
Hitting the mark
Ten years from now, every financial adviser in the country will be offering their client a managed account solution. It may happen ...
Featured Profile
Professional Subscription for $295
(inc GST) for 1 year.
FS Advice
The Australian Journal of Financial Planning.
Get the free iPad app
Download the Financial Standard iPad app for FREE.
Link to something Jx4MfUUV