The average yearly cost to support a financial adviser is relatively similar for a dealer group regardless of its size, a number of licensees have said.
For a large licensee it cost around $30,000-$35,000 to support an individual financial planner each year, MLC advice general manager Greg Miller said.
“But it also depends on the quality of services and so on that you supply,” Miller said.
“For a large licensee there’s also reputational risk that we have to think about.”
However, he said being a large dealer group allowed for economies of scale to lessen the cost of supporting a planner.
“That figure would certainly fall into the $20,000s once they got three or four advisers inside the one business,” he said.
For Wealthsure Financial Services, a licensee with more than 300 planners, the figure is around $20,000 with the maximum cost edging towards $25,000 due to fluctuating professional indemnity (PI) insurance costs.
“For a financial planner who is giving holistic advice it’s about $20,000, give or take a few thousand either way,” Wealthsure chief executive Darren Pawski said.
Pawski said scale did play a large part in providing cost efficiencies in areas such as compliance, software, administration systems, research and training.
Meanwhile, for a small dealer group such as Risk and Investment Advisors Australia (RIAA), it costs around $22,000 a year to support an adviser.
“I think you can do it cheaper but you’re going to have less frontline support. We deliberately have a reasonably expensive model at the moment while we’re ramping up the business,” RIAA chief executive Les Mace said.
