During the last few years, the financial planning industry has gone through wholesale changes with many advisers leaving the industry. According to AFR the supply of registered Financial Advisers is on track to be 50 per cent lower than before the Hayne Royal Commission in 2018, whilst the costs of providing advice has increased.
Despite fewer advisers the costs of being licensed has increased by 28% over the last few years to an average of $38,500 per adviser and indemnity insurance has increased to an estimated $6,000 per annum.
There are many costs with running a Financial Planning Business not limited to licensing costs and indemnity insurance such as office, software and support staff which, depending on the location and requirements of the job are estimated to be $50,000 – $80,000 per annum, let alone the advisor taking an income.
With the decline in advisers’ numbers and the uncertainty in the global economy it’s natural for there to be more work for those advisers who remain, however an increasing client base with increasing advice costs to cover the increased running costs does not always correlate to an increase in profit.
However, there are areas that you can save costs and create efficiencies within the business to help create a profit margin.
Through speaking to advisers, we have established that in most cases seeing clients is not the hard part, it’s completing the research and working papers preparing the file for paraplanning so they can present their advice.
Of course, in some cases the adviser will have a CSO to help assist them which is costing them around $60,000 + Super plus holidays etc. This is additional money that needs to be paid even if there is no business being written or the adviser goes on holiday, which could put a strain on the business’s cash-flow.
In cases where the adviser does not have a CSO to assist they will be spending time away from speaking to their clients to conduct their own research and complete their own files which is possibly not the best use of their time and could be better spent speaking with more clients, generating more business.
Quantum Professional Support has a cost and time effective solution where we can complete the research, write the working paper and prepare the file for paraplanning on their behalf, allowing the adviser time to continue speaking to their clients and generate more business.
Quantum Professional Support and Paraplanning works in the same way as an outsource solution where the adviser pays a set fee for the file to be completed which can be factored into the fees charged to their client ensuring they are not out of pocket and have no monthly obligation to pay.
If you would like a discussion around how this may work for you and your business, please call Chris on 07 5532 9516 or email chris@quantumsupport.com.au