Every few years, we do a research study to put together our Adviser Pricing Models Research Report. We’re currently in the middle of the data collection right now, and thought we might reveal a couple of the findings that we’ve discovered. Of course, when we re-cut the data after closing off submissions, the numbers will change somewhat, but so far, we’ve been fascinated to see that:

  • Whilst the average EBIT that advisers are targeting (after a normalised salary to Principals of $150k pa) is 35%, the average actually being achieved right now is only 13.5%. There’s a lot to consider when interpreting that, which I’ll go into in an article we’ll release next week, but it’s really interesting to then look further and see what businesses are doing to improve this EBIT
  • No surprises that 75% of advisers have found their costs have increased in the last five years, and 17% have stayed roughly the same… it’s interesting reading what is causing those costs to increase, and we’re looking forward to sharing some techniques to reduce costs
  • We have certainly found more advisers are charging some iteration of fees for their risk advice, and the numbers of those replacing commissions with fees have lifted from the last report two years ago. We’re discovering some interesting techniques being used, and opinions of advisers who have commenced the process
  • The businesses who are enjoying over 30% EBIT, averaged 27 new clients in the past year, and the most popular sources of new clients were ‘receiving referrals from clients without specifically asking for them’, and ‘referral sources that send clients our way’.

There is enough valuable information in this data to keep us poring over it for months, but we promise we will have our experienced team collate the findings and release the report in April.

We’re still conducting interviews and we’re closing the online survey off next week, so if you haven’t yet spent your 15 -20 minutes to share your pricing model, you still have a few days left.

Why would you want to do that? Well, there’s three very compelling reasons:

  1. It’s the only way you’ll get a free copy of the Adviser Insights edition of the research,
  2. It’s the only way to get in the draw for a $2,000 travel voucher, and
  3. It’s actually a very worthwhile exercise, to consider how you price, how you handle certain situations and of course the effect of those decisions on your business. If you have multiple advisers in your business, it’s a great way to see if you’re all on the same page with your pricing. An adviser emailed me just yesterday and said “Thanks for putting something like this out in the market place, it was a most worthwhile exercise to complete the survey”.
  4. in case you’re concerned, a fourth reason is we enter into a confidentiality agreement with you, ensuring we’ll never reveal your identity, so you can feel comfortable sharing your innermost pricing secrets!

We’re so looking forward to closing the survey next week and analysing the data properly to write the Research Report. We can’t wait to find out the answers to questions like…

  • What do advisers charge for Aged Care advice?
  • At what point in the advice process do advisers position fees, both initial and ongoing?
  • Of course, the actual numbers that advisers are charging for initial advice, ongoing services, risk-only, limited scope advice…and the actual fees they’ve quoted the six client case studies we put to them.
  • We’re especially keen to see what sets the high profit firms apart from those not yet hitting their target margins,
  • And most of all, the qualitative elements of pricing models that tell us so more than simply the headline figures.

If you haven’t yet participated, don’t wait until it’s too late! Click here to complete the survey.

 

2 Comments
  1. David Millard 8 months ago

    Hi Sue,
    Our business consists of 1 adviser with 3 employees. Income in is around $400K pa so it is too small to work on an EBIT basis. There are e many more businesses like us. Although I am interested in being part of your survey, I feel that I cannot because your questions are directed towards the larger multi-adviser practices ( or what they call “the big end of town”)

    • Author
      Sue Viskovic 8 months ago

      Hi David,
      I’m so glad you brought this up… we are definitely capturing the single adviser businesses, but the survey is worded to be relevant to everyone. It can often be the case that a smaller business with only 1 adviser has a better EBIT margin than a larger one – depending on where they are at in their cycle of employing people and getting them up to capacity. As a business owner, you’ll often pay yourself less while you’re building capacity to bring on more revenue – so it is possible that when normalising to a $150k Principal salary, your EBIT goes into negative territory. The survey can accept negative numbers, albeit it’s painful to see it in that context!
      (If it makes you feel any better, multi-adviser practices can experience negative EBIT too!)

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