Bhanu Singh

This week’s move – with the S&P 500 approaching 2026 highs – is a timely reminder of how markets process uncertainty. Even amid heightened geopolitical tension, markets have once again demonstrated their forward‑looking nature, rapidly absorbing new information and repricing risk.

While headlines dominated by conflict can feel overwhelming, history suggests investors should be cautious about drawing long-term conclusions from short-term market reactions.

Markets are forward-looking. Prices move in response to changes in information. When unexpected developments arise that investors deem to be poor for markets, markets often drop.

But the flip side is markets always set prices for positive expected returns. Once the news gets reflected in market prices, investors can still expect positive returns even amid worrisome circumstances.

Bhanu Singh, CEO of Dimensional Fund Advisors Australia, notes:“Market volatility is a sign of a well-functioning market. Market prices are continuously responding to changes in expectations and new information. So, even while the news headlines may be concerning, investors have good reasons to stay invested because prices are always set to provide positive expected returns.”

Australian equity market history supports this perspective. Intrayear declines have ranged from approximately 4% to as much as 45%, yet many years that experienced sharp pullbacks still finished with positive full‑year returns. In fact, Australian stocks posted gains in 16 of the past 20 calendar years (Figure 1).

Figure 1:

This resilience extends globally. Global equity markets have continued an upward climb even in the face of economic and political upheavals. We don’t have to look far for illustrative examples. During the past few years, stock markets have had positive returns despite multiple wars being fought around the world (Figure 2).

“Investors in global equity portfolios inevitably face periods of geopolitical tensions and uncertainty,” Singh says.

“While the temptation to react to market highs and lows can be strong, particularly with the benefit of hindsight, staying invested through periods of uncertainty has historically tended to be the best bet for long-term investors. Tuning out the noise, maintaining discipline, and staying the course has been the most effective strategy for long‑term investors.”

Figure 2:

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In an uncertain environment from both an economic and personal standpoint, clients collectively are still very satisfied with their advisors.

Key findings

• Client trust at record levels: Advisors enjoy unprecedented loyalty, with industry NPS hitting 77.7.
• Peace of mind matters most: When asked how they measure value, clients ranked a “sense of security” above all else.
• Referrals drive growth: Only 20% of clients found their advisor through independent research, underscoring the power of trusted networks.
• Core services still lead: Investment management was rated the most important offering, closely followed by financial planning and tax planning.
• The next generation relies on family and friend referrals: Among clients under 40, 60% came to their advisor via family or friend referrals – highlighting an opportunity to connect early with the second generation of wealth.

The Dimensional Global Investor Study provides advisors with greater insight into how clients perceive their firms. By gathering direct, anonymous feedback from their clients, advisors gain a better perspective on what clients value in an advisory relationship, their financial needs and concerns, and ideas on how to engage with their ideal target client. In 2022, the Global Investor Study was made available year-round, allowing advisors to customise the frequency with which they are able to survey their end clients. This year marks the 10th year in which the study was available. Since the last dedicated survey period in 2021, 163 frms have participated, resulting in almost 22,000 total end-client responses. This brings the aggregate total responses since the inception of the study to almost 110,000 global respondents.

Methodolgy

Participating firms were provided with six required questions to ask their clients, along with the ability to select up to 10 additional questions, including two open-ended response questions. Firms then delivered the survey link directly to their clients. The survey was entirely anonymous, and no identifiable personal information was shared with the firm or Dimensional.

Read the study.

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Slava Platkov

Dimensional Fund Advisors, a global leader in asset management, has appointed Slava Platkov as Senior Investment Director within its Investment Solutions Group.

For more than 40 years, Dimensional has been translating academic research into practical investment solutions. Dimensional’s Investment Solutions Group brings together expertise from across research, portfolio management and client engagement to deliver high-quality investment communications and client-focused solutions.

In his new role, Slava will connect the firm’s global investment capabilities and local expertise to the development of investment solutions to help clients achieve their goals.

“We’ve been offering our systematic investment approach through financial intermediaries for over a quarter of century in Australia,” said Bhanu Singh, Dimensional Australia’s CEO. “Slava’s appointment deepens our commitment to how we support investment professionals in accessing our investment expertise on behalf of their clients.”

Slava Platkov joined the firm in 2012 and, prior to his appointment, served as a Senior Portfolio Manager for Dimensional. His experience spans all aspects of multi-manager investing, including manager research and portfolio construction. Slava holds a Master’s Degree in Applied Finance from Macquarie University and a Bachelor of Commerce from University of New South Wales, where he majored in finance and actuarial studies.

Founded in the US in 1981 and operating in Australia since 1994, Dimensional manages more than AUD$1.3 trillion for investors globally as of 30 June 2025, including AUD$69.2 billion for clients in Australia and New Zealand. Its clients are financial intermediaries like advisers, brokers and super funds.

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Bhanu Singh

Global asset manager Dimensional Fund Advisors, the world’s largest issuer of actively managed exchange traded funds (ETFs), has extended its suite of equity ETFs on the Australian Securities Exchange (ASX) to support financial professionals seeking to access the firm’s systematic approach.

Following its initial launch last November of three actively managed core equity strategies in ETF form, Dimensional has now supplemented that offering with three component funds explicitly targeting long-term premiums available from Australian and global value stocks, as well as global small caps.

The three new strategies are the Dimensional Australian Value Trust (DAVA), the Dimensional Global Value Trust (DGVA) and the Dimensional Global Small Company Trust (DGSM). As with the core funds, the new vehicles are available in a “dual-access” structure accessible through both ASX-listed and unlisted distribution channels.

“These component strategies supplement the Australian and Global Core Equity ETFs launched last year and allow financial professionals to tailor asset allocations to meet a range of client needs,” said Dimensional Australia’s CEO, Bhanu Singh.

“Our strategies offer the benefits of indexing—such as low costs, low turnover, and high diversification—paired with the advantages of flexible implementation that provide a continuous focus on higher expected returns.”

Dimensional’s first three local ETF offerings were Australian Core Equity (DACE), Global Core Equity—Unhedged (DGCE) and Global Core Equity—AUD Hedged (DFGH). Those strategies provide broad exposure to the Australian and other developed equity markets, while emphasising the size, value and profitability premiums. The component strategies offer a more targeted approach to those individual premiums.

Dimensional was founded in the US in 1981 and has been in Australia since 1994. The firm manages more than $AU1.1 trillion for investors globally, including more than $50bn for clients in Australia and New Zealand. Its clients are financial intermediaries like advisers, brokers and super funds.

Systematic investing or factor-based investing is a rules-based approach to managing money. It replaces the subjectivity of traditional active management with rigorous academic research and avoids the restrictions of indexing through an active but process-driven pursuit of higher expected returns.

“For four decades, we have focused on empowering investment professionals so they can deliver their clients the best investment experience, says Nathan Krieger, who heads Dimensional’s client group in Australia. “We believe a rules-based investment approach can help deliver a more reliable and smoother markets experience for investors and can help to better address a variety of portfolio goals and aspirations.”

Dimensional entered the ETF market in the US in November 2020. Since then, the firm has experienced significant growth, becoming the largest issuer of actively managed ETFs globally. The firm now offers more than 35 ETFs in the US with approximately $220bn in assets. It decided last year to begin offering funds under the dual-access model in Australia because of requests from intermediaries for greater flexibility in how they access the firm’s approach.

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• Research demonstrates that serving younger clientele leads to higher growth for advisory firms.
• Younger investors measure the performance of their investments based on progress toward their goals and are willing to accept larger short-term drawdowns on their investments.
• By targeting the size, value, and profitability premiums, advisors can help young investors make more progress toward their long-term goals.

Younger and older investors are likely to have different preferences in music, movies, and fashion. How about investments? And if so, what does it mean for financial advisors serving different generations?

Dimensional Fund Advisors regularly conducts a Global Advisor Study and a Global Investor Study, collecting survey data from advisors and advisors’ clients (the investors) to help advisors better understand their businesses and the industry at large. A review of the Global Advisor Study from 2015 to 2019 identified an aging client base as one of the most meaningful challenges and strongest detractors from growth for a financial advisory firm.^[1]

Naturally, many advisors may therefore be seeking to win over and retain more younger clients. For many firms, the focus on younger clients will kick in as they seek to engage the future beneficiaries of their older clients or seek to create opportunities for their younger advisors. Understanding how younger investors view investing and the value they place on planning can support this effort. But what differentiates younger clients from older?

A recent examination of results from the Global Investor Study reveals that younger investors tend to care most about seeing progress toward their goals, whereas older investors are more interested in absolute return. We classify “younger investors” as those younger than 40 and “older investors” as those older than 60. Middle-age investors fall in between.^[2]

From 2017 to 2019 and from 2021 to 2023, the Investor Study collected 38,976 responses to the question “When I look at the performance of my investments, what is it most helpful to see?” Exhibit 1 shows the percentage of each age group that selected “progress toward my goals” as the first choice.

Of young investors, 33% selected “progress toward my goals,” compared with 26% of middle-age investors and just 18% of older investors. To put it another way, young investors were almost twice as likely to prioritize progress toward their goals as older investors. The most frequently selected first choice by older investors was “percentage return over a given period.”

Exhibit 1 Preferences by Age Cohort

Notes: The Global Investor Study is sent out each year to the end clients of participating third party advisor firms that use products of Dimensional Fund Advisors and is administered through an online questionnaire. The study gathers highlevel demographic information, including client age, gender, and investable assets, and it features rotating themes. Firms can choose from a set of optional questions to accompany the standard study questions and customize the study for multiple client segments. For the purposes of this article, data are pulled from the Investor Study from the years 2016– 2023. The table reflects 38,976 responses to “When I look at performance of my investments, it’s most helpful to see” from survey years 2017–2023 (the question was not asked in 2020) and 87,173 responses to “I primarily measure the value received from my advisor based on” from survey years 2016–2023. There are instances in the data where respondents have answered one question but not the other. Percent responses are defined as the percentage of respondents within a given age bucket that selected a given choice.

The results are consistent when survey respondents were asked how they primarily 2 Dimensional Fund Advisors Please see the end of this document for important disclosures. measure the value they have received from their advisor. Of the 87,173 responses collected from 2016 through 2023, 31% of young investors selected “progress toward my goals,” whereas just 13% of older investors selected that response. In this case, young investors are more than twice as likely to measure the value of their advisor based on progress toward their goals. For older investors, the first-choice measure of the value of advice is sense of security/peace of mind (selected as the first choice by 39% of older investors). Like with tastes in pop culture and clothes, the generations can differ.

Data from the Investor Study also reveal that younger investors tend to have a high tolerance for drawdowns. When asked, “At what level of negative returns would you call your advisor to make a significant change to your investments?” responses indicate that if the market drops by up to 15%, only 14% of young investors will call their advisor, while 21% of older investors will do that. The difference remains similar if the market were to drop 30%.^[3]

The emphasis on goals-based investing and a willingness to accept drawdowns creates an opportunity for advisors to better serve their younger clientele through targeting equity premiums while maintaining a broadly diversified portfolio.

Research by Dimensional shows that taking advantage of reliable equity premiums can improve retirement outcomes.^[4] The research compares a hypothetical plain total market portfolio with a hypothetical integrated core portfolio that emphasizes the size, value, and profitability premiums. Efficiently targeting these premiums can reduce the likelihood of running out of money in retirement and can lead to larger bequests.

The results also highlight the value of holistic wealth management. Goals-based models, for example, are another tool available to help investors build solutions focused on financial goals rather than just short-term investment returns.

It turns out music, movies, and fashion aren’t the only things dividing generations. When advisors understand the distinct preferences of younger clients, they can refine their service models and engage planning technology that helps drive discussion around goals and financial well-being. Specifically, recognizing and adjusting to younger investors’ focus on progress toward goals may make it easier for advisors to win over the next generation of clients.

By Gordon Titman, Associate, Research

——–

Notes:
[1] Wei Dai, Marco DiMaggio, Kaitlin Hendrix, Wiebke Lamping, Savina Rizova and Trey Roberts, “What Drives Growth for Financial Advisors? Evidence from a Multi-Year Survey” (white paper, Dimensional Fund Advisors, May 2023).The study shows that every percentage point increase in the number of clients over 70 years old is associated with AUM growth that is 21 basis points (bps) lower for that year, whereas the reverse is true for clients under 40. Every percentage point increase in clients under 40 is shown to be associated with a 30- basis-point increase in AUM growth for that year. Based on a sample of 1,369 firms.
[2] Age is provided by survey participants answering a multiple-choice question with age ranges. The age range changed across survey years. In survey years 2016–2020, the age range choices were 18–34, 35–44, 45–54, 55–64, 65–74, and >74. In survey years 2021–2023, the age range choices were <40, 41–50, 51–60, 61–70, 71–80, >80. Younger investors include those age 44 and below in survey years 2016– 2020 and those below age 40 in survey years 2021–2023. Older investors include those over age 64 in survey years 2016–2020 and those age 61 and above in survey years 2021–2023.
[3] Results are based on a sample of 6,778 responses from survey years 2018–2020.
[4] Mathieu Pellerin, “How Targeting the Size, Value, and Profitability Premiums Can Improve Retirement Outcomes” (white paper, Dimensional Fund Advisors, April 21, 2023).

• Profitability premium: the return difference between stocks of companies with high profitability over those with low profitability.

• Size premium: the return difference between small capitalisation stocks and large capitalisation stocks.

• Value premium: the return difference between stocks with low relative prices (value) and stocks with high relative prices (growth).

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Bhanu Singh

Global asset manager Dimensional Fund Advisors, the world’s largest issuer of actively managed exchange traded funds (ETFs), today will launch ETFs in the Australian market to support those financial professionals seeking new ways to access the firm’s systematic investment approach.

Dimensional is initially offering three actively managed core equity strategies locally in a “dual-access” structure under which investors can access a fund through both ASX-listed and unlisted distribution channels. This allows investors to hold and transact in diverse ways according to their own preferences.

“We’ve been offering our systematic investment approach through financial intermediaries for nearly a quarter of century in Australia,” says Bhanu Singh, Dimensional Australia’s CEO. “By launching ETFs, we are expanding their choices in how they access our investment expertise on behalf of their clients.”

The three initial strategies Dimensional is offering in ETF form are Australian Core Equity, Global Core Equity (Unhedged) and Global Core Equity (AUD Hedged). These strategies – among the firm’s most popular – provide broad exposure to the Australian and other developed equity markets, while emphasising the known drivers of higher expected return in small caps, value stocks and more profitable companies.

Dimensional was founded in the US in 1981 and has been in Australia since 1994. The firm manages more than $AU900 billion for investors globally, including more than $38bn for clients in Australia and New Zealand. Its clients are financial intermediaries like advisers, brokers and super funds.

Systematic investing or factor-based investing is a rules-based approach to managing money. It replaces the subjectivity of traditional active management with quantitative research and avoids the rigidities of indexing through an active but process-driven pursuit of higher expected returns.

Dimensional entered the ETF market in the US in November 2020 following a regulatory change. Since then, the firm has experienced significant growth, becoming the largest issuer of actively managed ETFs globally. The firm now offers more than 30 ETFs in the US with approximately $US100bn in assets. It has now decided to move to the dual-access model in Australia because of requests from intermediaries for greater flexibility in how they access the firm’s approach.

“Our success in the US and our discussions with local clients tell us that some prefer the flexibility that ETFs offer,” says Nathan Krieger, who heads Dimensional’s client group in Australia. “It just gives advisers and other intermediaries more ways to access what we do. And we always start with client need.”

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Bhanu Singh

New Zealanders seeking global investment solutions that target measurable sustainability goals without sacrificing broad diversification, efficient tax management and higher expected returns now have additional access to the systematic strategies of one of the world’s most respected fund managers.

Dimensional Fund Advisors, which has a four-decade history of applying Nobel Prize-winning research to investing, has launched for Kiwi investors an Australian sustainability equity fund within a Portfolio Investment Entity (PIE), a tax-effective NZ-domiciled investment structure. The fund has gone live this week.

The launch of the Australian fund comes nearly 16 months since Dimensional offered two Global Sustainability Funds within the increasingly popular PIE structure. Those funds – one unhedged and the other hedged to the NZ dollar – now have more than $NZ450 million in assets under management.

Offering tax benefits to Kiwi investors and implementation advantages for advice firms, PIE funds have been rapidly expanding relative to Australian unit trusts in recent years. Over the past decade, PIEs have grown at a rate of 12.4% per annum to a total of nearly $60 billion in assets as of July this year.^[1]

“We have seen a strong appetite among New Zealand financial intermediaries for both our systematic investment approach and our sustainability strategies in recent years,” said Dimensional Australia Chief Executive Officer and Head of Asia Pacific Portfolio Management, Bhanu Singh.

“While some Kiwi clients are happy to continue investing through our Australian resident unit trusts, others have said the PIEs make more sense from an administration and tax perspective,” Singh said. “Ultimately, we want to give intermediaries choice in how they access our investment expertise.”

In a PIE, the tax administration is handled within the fund as opposed to the clients having to incorporate the fund’s returns and performance information within their own tax returns. This tax efficiency is aided by the fund holding stocks directly rather than via an offshore vehicle.

Dimensional, founded in the US in 1981 and with 14 offices around the world, now manages close to $NZ1 trillion for clients globally using a systematic investment approach. The firm applies financial science in real-world portfolios integrating research, portfolio design, management and trading. 2

This material has been provided by DFA Australia Limited (AFS License No. 238093, ABN 46 065 937 671). This material above is provided for information only. No account has been taken of the objectives, financial situation or needs of any particular person. Accordingly, to the extent this material constitutes general financial product advice, investors should, before acting on the advice, consider the appropriateness of the advice, having regard to the investor’s objectives, financial situation and needs. Any opinions expressed in this publication reflect our judgment at the date of publication and are subject to change.

Dimensional opened its Australian office in Sydney in 1994, initially as a regional trading centre, and began offering strategies tailored to Australian and NZ clients from 1999. These days, it manages more than $40 billion on behalf of clients in Australasia.

Among its most popular strategies in this part of the world are its sustainability suite of equity and fixed income funds which are designed to reduce carbon footprint exposure across markets and within industries while pursuing higher expected returns in a cost-effective and diversified way.

“New Zealanders increasingly are wanting to align their investments with their personal values around sustainability, but they also want to maintain the focus on their financial goals,” Singh said. ”So that requires a disciplined approach to sustainability within a sound investment framework.”

The newest PIE in Dimensional’s offering to New Zealanders is based on the Australian Sustainability Trust. Since its inception five years ago, this Trust has delivered competitive returns via a systematic focus on higher expected returns compared to its benchmark. It also delivered substantially reduced exposure to weighted average carbon intensity and potential emissions.

Total annual charges for the new fund is estimated at 0.35%. In launching the PIE, Dimensional is partnering with fund hosting platform FundRock New Zealand, which is registered as manager and issuer of the funds.

———

[1] Source: Morningstar

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Warwick Schneller

The post-pandemic working-from-home trend and the impact of rising interest rates in many countries have focused media attention on what all this might mean for commercial property investment.

If you have listed property in your portfolio, this might prompt you to ask what you should do about that news. There are few issues to consider here:

First, the post-COVID working from home trend is not news to markets. Real estate investment trusts (REITs) focused on office properties have fallen nearly 25% since the start of 2022. By contrast, other REITs declined by only around 13% in that period.

Second, keep in mind that office REITs are only one segment of the market, accounting for just 8.1% of the S&P/ASX 300 A-REIT Index as of June 2023.

In offering exposure to many types of properties and structures, a broadly diversified strategy mitigates the impact of any one category and potentially provides more reliable outcomes for investors.

Third, the gradual drop in values in listed securities over 18 months reminds us that public markets offer the benefits of real-time pricing, transparency and liquidity. By contrast, owners of unlisted property often have to play catch-up by making sudden and dramatic devaluations. In this way, returns of securities with infrequently updated prices may appear less volatile than in reality.

Finally, for investors dismayed by recent REIT returns in general, history offers an optimistic note. While it has been a rough 18 months for listed real estate, with cumulative negative returns of around 17%, this same asset class over the past four decades has delivered average annualised returns of more than 9%.

All that adds up to there still being a place for property in a diversified portfolio.

By Warwick Schneller, Senior Investment Strategist and Vice President

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Wes Crill

If you were to poll strangers on what comes to mind when they hear the term AI (artificial intelligence), I suspect the two most likely answers would be Skynet or ChatGPT.

The generative chat program launched in 2022 seems to have drawn the most mainstream attention to AI applications since Arnold Schwarzenegger promised he’d be back. But the history of AI tools is far older than ChatGPT, although less dramatic than its depiction in 1990s science fiction films. And from an investment standpoint, artificial intelligence pales in comparison to the informational content of the market’s AI—aggregate intelligence.

AI has been among us for years

ChatGPT is but a recent example of AI. One watershed moment came in 1997 when the machine named Deep Blue became the first computer to secure victory in a match against a chess grandmaster. In the mid-2000s, IBM researchers created the Watson computer to compete with star Jeopardy! contestants, ultimately defeating two of the show’s most decorated past champions. And how many of us routinely dispense orders to, and receive suggestions from, Siri or Alexa?

The common thread among these examples is that each represents a tool that processes and organizes data to identify patterns and summarise information or make suggestions. This type of interaction with AI has grown to permeate our everyday lives. Have you noticed your phone offer an unsolicited ETA for your commute when you get in your car? Does your text app suggest grammar revisions based on the context of your overall message? Congrats—you’re an AI user, even if you’ve never opened a ChatGPT session.

AI may not help pick stocks…

AI has a similarly long history with investing. Active investors have attempted to get an informational edge on markets by using AI processes to retrieve and process data. For example, tools that gauge sentiment from social media or scrape text from company financial reports predate ChatGPT by many years.

While these efforts may have been aimed at selecting stocks that would outperform markets, it’s not clear AI tools are a recipe for consistently generating abnormal returns. Material information gleaned from running AI processes is very likely a subset of the vast information set known by the market in aggregate and reflected in market prices. If new information is obtained, the process of acting on that information (buying or selling stocks/bonds) incorporates it into market prices. As more investors employ these tools, any edge from doing so should wane.

Another reason to question AI’s role in helping market timing is limitations with its predictions. AI’s forecasting ability fares well when assessing patterns that are relatively stable. For example, my phone’s navigation app is often successful at “guessing” when I’m commuting to work because I come to the office on the same days each week. Autonomous car navigation programs know to slow down at the sight of a stop sign because these visual cues are universal and evergreen.

AI is far less likely to successfully predict changes within complex systems that are as dynamic as stock and bond markets. AI trying to predict market prices is like self-piloting cars trying to read stop signs with words, shapes, and colours that differ from one day to the next. The continuous emergence of new information material to market prices is antithetical to static patterns fostering predictability.

…But it may enhance a fund manager’s process

AI can make businesses more efficient if used as a tool for what Professor Robert C. Merton describes as “assisted implementation”—interrogating data, servicing clients, or making processes more efficient. But like any tool, you have to know how to use it. For example, if it makes interrogating data much easier, then the chances of finding results from data dredging increase. Where using AI can be very helpful is for firms with massive data sets on their customers’ activities. It can help those firms identify what their customers are more likely to buy next and advertise in a smart way.

Over time, the best chess players realised chess computers were a powerful supplement to strategy and pattern recognition. Similarly, the best path forward for investment management is likely an amalgam of humans and technology such as AI.

By Wes Crill, PhD, Senior Investment Director and Vice President

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Client-focused advice and efficient value-added access to capital markets can be a successful combination for both.

Managing compliance and regulatory changes has emerged as the number one operational challenge for Australian financial advice firms in a major new global survey of the financial planning industry by asset manager Dimensional Fund Advisors.

Implementing workflow processes and improving profitability were the second and third ranked initiatives among the sample of more than 100 local advisory firms, representing some $24 billion in assets.

The local survey was part of a global study of advisory firms by Dimensional, now in its 11th year, which covered more than 800 participants in North America, the UK, Europe and the Asia Pacific – and focusing on business strategy, growth/marketing, human capital and the new business landscape.

Of the Australian sample in the survey, 58% of firms cited managing compliance and regulatory changes as one of their top three operational initiatives or challenges. This was in marked contrast to the US survey cohort, where only 12% of firms cited it as a top initiative.

The Australian Securities and Investments Commission this year consulted with the industry on how to promote access to affordable advice.

In 466 submissions received, many cited rising regulatory and governance costs – including the time dedicated to lengthy Statements of Advice. In reply, ASIC just issued guidance to the industry on how it can use shorter and less formal Records of Advice in certain circumstances such as when no product recommendations are made, where very small sums are involved or due to relief allowed under the pandemic until April, 2022.

Dimensional Australia’s Client Group Co-Head Nathan Krieger said his firm’s advisor and equivalent investor surveys show year after year that those with the benefit of a financial advisor value that relationship highly. The challenge for the industry is how to make that service both more widely accessible and profitable.

“What we know is that advice firms are being incredibly purposeful about how they grow their businesses, how they improve their processes and being aware of the obstacles they need to overcome,” Krieger said. “On the operational side, though, it seems the regulatory environment is still the number one focus.”

In terms of growth, the survey found the top two priorities for Australian firms are sourcing and converting prospects, with referrals both from existing clients and from centres of influence still the dominant source of growth – eclipsing digital marketing and other initiatives.

Interestingly, the study showed higher growth firms are dealing with capacity issues by investing more in new specialised in-house or outsourced roles – such as dedicated business development officers, tax specialists, digital marketing experts, estate planning and family office services.

Among other findings in the survey:

• Focusing on systems and processes to improve efficiency is reflected in a much higher ratio of revenue per full-time employee among the top quartile of firms ranked by profitability.
• While firms have modestly raised their fees in the past three years (to around 1 percentage point for clients with $500K in assets) there has also been a shift to more hybrid pricing such as retainer fees.
• In terms of the post-COVID business landscape, faster-growing firms are more likely to provide IT benefits to their employees and two thirds allow staff and management to work from home.

Dimensional’s Krieger said as a wholesale asset manager that does not deal directly with the public, his firm has an interest in seeing financial advisors improve their capacity to both deliver high quality advice to as many people as possible, while building profitable and fast-growing businesses.

“We want to build deep, working relationships with advisors who share our desire to pursue better financial outcomes for their clients,” he said. “At the end of the day, client-focused advice and efficient value-added access to capital markets can be a successful combination for both.”

Founded in the US 1981 and present in Australia since 1994, Dimensional has a long history of applying academic research to practical investing. The company now manages more than $800 billion from 13 offices globally, including about $45 billion for clients in Australia and New Zealand.

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