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
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