Sue Viskovic
Elixir Consulting has released their ‘Adviser Pricing Models Research Report, third edition’ which reveals the pricing models and fees charged by advice businesses around Australia.
Elixir Managing Director, Sue Viskovic said “This is the third edition of the research; following on from our research in FY 2009 and 2012, and it is interesting to see the evolution of pricing throughout this time. Given that FoFA had been in play for some time when we collected the data, we initially thought that just doing an online survey would suffice this time around. We didn’t expect to see too many new pricing strategies or techniques, we actually just thought we would be updating the numbers and preferences. It turns out though, that we found a considerable variance in the models being used and some really interesting trends appearing. After analysing the data we went back to a number of participants and conducted further interviews to flesh out some of these new trends.
The final report reveals the pricing models used by 275 advice practices around Australia, and shares the pricing strategies being used, the figures used for staff charge-out rates, upfront fees for limited scope and comprehensive advice, as well as ongoing fees, and insurance advice. A new feature of this edition is client case studies – participants were also asked to quote the fees they would charge and service they would provide to five sample clients.
“What we have found is that this information is tremendously useful for business owners who are refining their fee structures and licensee staff who help them. Understanding what models are working for others and what price points are being used can help to broaden the thinking and provide solutions for various challenges. We absolutely do not advocate that advisers simply replicate someone else’s fee model; indeed the research again confirms that it’s important to conduct a robust process and analyse the costs, clients and value proposition of each firm when determining pricing.”
“In particular, with the proposed changes to insurance commissions, we’re hearing a lot of fear that clients won’t pay fees for insurance advice. Our research shows that there are already businesses who successfully charge fees for insurance advice, both when it’s provided as part of a comprehensive financial plan, and when it’s provided as standalone advice. 11% of participants in the research have removed insurance commissions altogether, writing premiums with nil commissions; in fact only 13% charge no fees for insurance advice and receive commission-only. Charging for insurance advice is certainly one of the most complex areas of pricing, but the research shows that it is possible.”
The research is available in two different formats from the Elixir website.
