Advisers bolster client book amid compliance burden: CoreData

Financial advice practices are serving more clients, charging higher fees and reporting record levels of satisfaction with their licensees, despite the weight of compliance, according to CoreData.

The average number of clients per practice has increased from 127 to 135 over the past year, the newly released Future of Advice 2026 report showed.

Advisers who were early adopters of technology managed 13% more clients than their peers or 147 compared to 130 clients for non-early adopters of artificial intelligence (AI).

CoreData found advice businesses are becoming increasingly differentiated by how they adopt technology and integrate digital tools into their operations.

Fee increases have continued year-on-year, reflecting strong demand for financial advice and the ability of practices to grow client numbers despite ongoing workforce constraints, the survey found.

Licensee satisfaction also reached a record high, with 84% of advisers reporting they are satisfied with their licensee.

CoreData said satisfaction has continued to trend higher, well above the 66% recorded in 2023.

Advisers credited proactive support, a strong business development focus and a sense of community as key attributes of high-performing licensees.

One adviser said their licensee delivered "a high standard of support with significant flexibility" that enabled them to run a successful business, citing quality research, daily meetings, accessible compliance teams and support for innovations, such as AI and Microsoft Copilot.

Another adviser praised the "sense of care and accountability from senior management to frontline staff", alongside strong technical capability and in-house investment support.

The report found growth-oriented advisers consistently rated their licensees more highly than their peers, particularly in areas such as advice quality, business support and operational assistance.

The most highly rated licensees were viewed as competent, trustworthy and effective in delivering on their commitments, while helping advisers provide high-quality advice to clients.

However, CoreData also highlighted areas where advisers believe licensees could improve. While advisers rated their licensees strongly for industry commitment, lower scores were recorded for adviser recruitment and succession support.

Licensees received some of their weakest ratings for helping practices find new advisers and improving adviser standards through recruitment policies, suggesting a gap between strategic support and practical business assistance.

The report revealed significant differences between networked and self-licensed advisers.

Self-licensed advisers were more likely to report disrupted sleep, difficulty switching off from work and a loss of motivation, reflecting the additional responsibilities associated with holding an AFSL.

By contrast, fewer than one in 10 advisers operating within a licensee network said they would consider switching licensees. Among those open to moving, lower fees, stronger administrative support and better technology integration were the most compelling reasons.

Meanwhile, almost one-quarter of self-licensed decision-makers indicated they would consider moving back to a licensee network model.

Compliance remains the biggest operational challenge for self-licensed firms, according to the report, with advisers warning the realities of self-licensing are often underestimated.

The annual AFSL audit, together with the need to continually adapt systems and processes to changing legislation and regulation, was identified as major pain points.

One self-licensed adviser offered a cautionary note for peers considering the transition.

"Self-licensing gives you control, but it comes with a lot more responsibility than people expect," the adviser said.

"Be realistic about the time you'll spend on compliance, systems and operations."