In a world where money talks, owning a financial planning business lets you not only listen but lead the conversation.
From retirement dreams to investment schemes, financial planners are the go-to guides for navigating the often bewildering world of wealth management.
But beyond the spreadsheets and superannuation, buying into this industry is like cashing in on a never-ending stream of demand.
Financial planning in Australia is big business—really big.
With over 15,000 registered financial planners, and an industry worth more than AUD $5 billion, the future looks brighter than a well-diversified portfolio.
As Australians face an increasingly complex financial world—juggling super, savings, investments, and a barrage of new regulations—the role of financial advisors has never been more crucial.
Did you know? About 50% of Australians seek professional advice for their financial matters, and that number is steadily climbing.
With the rise of fintech and growing awareness around retirement planning, now could be the perfect time to cash in on this ever-growing market.
In this guide, we’ll help you discover the types of financial planning businesses up for grabs, the pros and cons of buying one, and everything you need to ask before taking the plunge.
Whether you’re looking to build a steady stream of income or help people build their nest eggs, a financial planning firm is the kind of investment that truly pays dividends—literally and figuratively.
Exploring the Different Types of Financial Planning Businesses in Australia
Financial planning is a diverse industry in Australia, catering to various client needs.
From wealth management to corporate advisory services, each type of firm brings unique expertise and opportunities for growth.
Wealth Management Firms
These firms serve high-net-worth individuals (HNWIs) with personalised services like investment portfolios, estate planning, and tax-efficient strategies.
Australia, home to over 1.8 million millionaires, sees substantial demand for these services.
Wealth management offers high-profit margins but requires advanced expertise, such as certification as a financial planner (CFP).
Retirement Planning Firms
Australia’s ageing population—projected to reach 22% over 65 by 2057—fuels demand for retirement planning.
These firms specialise in superannuation, pensions, and ensuring long-term financial stability for retirees.
With over 4.2 million Australians already aged 65 or older, the need for retirement planning will continue to grow for decades.
Investment Advisory Firms
With around AUD $4.4 trillion invested in managed funds, investment advisors guide clients on asset allocation, stock market investments, and diversified portfolios.
These firms may also provide advice on tax optimisation and risk management strategies, helping individuals and businesses maximise their investments.
Estate and Succession Planning Firms
Estate and succession planners assist clients in passing wealth to the next generation.
Services include wills, trusts, and inheritance tax planning.
Given the estimated AUD $3.5 trillion expected to be transferred between generations over the next 20 years, this niche sector is rapidly expanding.
Insurance and Risk Management Firms
Life is unpredictable, and these firms help clients mitigate risks through life insurance, income protection, and disability coverage.
Despite only 32% of Australians having life insurance through superannuation, there’s a growing market for bespoke insurance solutions.
Corporate Financial Advisory Firms
Corporate advisory firms provide financial guidance to businesses, helping them with superannuation management, investment strategies, and mergers or acquisitions.
With over 2.4 million small businesses in Australia, corporate financial planning is a burgeoning field.
Holistic Financial Planning Firms
Offering a one-stop shop for comprehensive financial management, holistic financial planning firms cover budgeting, debt management, retirement, investment, and insurance advice.
These firms often boast higher client retention rates due to their broad service offerings, which meet a wide range of financial needs under one roof.
Comprehensive planners help clients feel more secure about their financial future, making them a popular choice for those seeking full-service solutions.
Overall, the variety within financial planning businesses allows entrepreneurs and firms to tailor their offerings to meet client demand,
whether that’s working with retirees, managing investment portfolios, or guiding corporate clients through complex financial landscapes.
The sector is primed for growth, with Australia’s ageing population, intergenerational wealth transfer, and corporate market providing steady demand for financial advice.
The Future of Financial Planning: Navigating Challenges and Opportunities
Over-Regulation Escalates Advisory Fees
Australia’s financial planning industry is grappling with over-regulation, particularly since the 2019 introduction of stringent professional standards.
The requirement for a year of training has led to a significant decline in qualified advisors, escalating the cost of financial advice.
These inflated fees, coupled with rising living costs, have widened the “advice gap,” leaving many Australians unable to afford essential financial planning services.
People in urgent need of retirement or complex financial advice have been the hardest hit, further emphasising the unintended consequences of regulatory oversight.
Technology: A Double-Edged Sword
While fintech and digital advisors offer a lifeline to those priced out of traditional financial advice, these innovations also challenge established models.
Many advisors are adopting AI-driven tools to streamline services, particularly for high-net-worth clients, improving efficiency and profitability.
However, these advancements intensify competition.
Fintech solutions may offer convenience and cost-savings but are creating disruption for traditional advisory firms by appealing to lower-income clients who require affordable options.
Impact of the Royal Commission
The 2019 Financial Services Royal Commission (FSRC) exposed malpractices across the sector, including poor advice and improper fees.
The fallout eroded trust in financial advisors, leading to regulatory reforms and legal challenges.
Notable scandals involving major players charging clients without providing services have damaged the industry's reputation, prompting a restructuring among the big four banks.
In response, many have reduced or sold off their wealth management divisions, leading to a wave of mergers and acquisitions among dedicated advisory firms.
Future Outlook: New Opportunities on the Horizon
The Federal Government’s proposed reforms, Delivering Better Financial Outcomes, aim to narrow the advice gap by simplifying regulations and reducing advisory fees.
With a focus on making financial advice more accessible and understandable, these reforms will benefit Australia’s ageing population, particularly through superannuation fund services.
Simplified advisory processes and the introduction of more affordable financial advice could expand the client base and drive industry growth.
The anticipated changes also align with growing ESG investing trends, as clients seek more sustainable investment strategies, further boosting demand for advisory services.
ESG: A Growing Catalyst for Change
As ESG and responsible investing gain traction, advisors need to expand their knowledge of sustainability metrics and risks.
This shift is reshaping the industry, especially among younger, environmentally-conscious investors.
Advisors who can incorporate ESG factors into financial planning are poised to gain a competitive edge, retaining clients who prioritise sustainable and socially responsible investment strategies.
The Digital Advice Revolution
Digital advice channels are rapidly reshaping the landscape.
Fintech start-ups are offering fast, affordable solutions to a tech-savvy generation, while superannuation funds and insurers are expanding personal advice via digital platforms.
This trend towards online service provision, coupled with the increasing demand for immediate, secure digital interactions, will transform how financial advice is delivered.
Companies are investing heavily in network infrastructure, digital tools, and cybersecurity to accommodate this shift.
Financial advisors must adapt by becoming proficient with digital platforms to deliver high-quality, personalised advice in this evolving format.
Superannuation Funds Take on a Bigger Role
Australia’s ageing population, coupled with a rising number of retirees, places superannuation funds in a crucial position.
The financial advice reforms aim to make personal advice from super funds more accessible, considering broader factors like Age Pension entitlements and family situations.
This would provide older Australians with tailored advice, helping them better manage their retirement incomes.
Superannuation funds are expected to enhance their advisory services, creating a growing demand for qualified financial advisors capable of offering personalised advice within these institutions.
The industry is poised for significant change, driven by technology, regulatory reforms, and shifting client preferences.
Those who embrace ESG, digital channels, and superannuation advisory roles will be best positioned for future success.
What Are the Advantages of Buying a Financial Planning Business?
If you're considering entering the financial planning industry, you're looking at an opportunity that combines steady demand with strong growth potential.
Owning a financial planning business offers numerous benefits, from stable income to the chance to make a meaningful impact on clients’ lives.
Here are nine compelling reasons why investing in this industry could be the perfect move:
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Consistent, Year-Round Demand
Financial planning isn’t something people only need once in a while—it’s an ongoing necessity.
Whether it’s retirement strategies, tax planning, investment advice, or estate management, individuals and businesses need financial guidance all year round.
This makes the industry resilient to seasonal fluctuations.
Over 50% of Australians seek professional financial advice at least once in their lifetime, and with increasing financial literacy, more people are realising the importance of ongoing advisory services.
By 2026, the demand for financial advice is expected to rise by 7% annually, driven by the growing complexity of financial products and increased regulation. -
Recurring Revenue Streams
One of the most attractive aspects of owning a financial planning firm is the predictability of its revenue.
Many services—like portfolio management, retirement planning, and ongoing investment advisory—are structured around recurring fees.
Clients often sign up for long-term relationships, giving you a stable, predictable cash flow.
Around 80% of financial planning firms in Australia report that their income is derived from ongoing service agreements with clients, ensuring steady revenue streams.
This allows you to grow without constantly needing to find new clients. -
High-Profit Margins
Financial planning businesses typically operate with lower overhead compared to other professional service industries.
Once clients are onboarded, maintaining relationships requires minimal expense, especially with today’s digital tools and virtual communication options.
Profit margins for financial planning firms can range from 20% to 40%, depending on your client base and service model.
With technology streamlining client communication and portfolio management, some financial planners are seeing profit margins soar past 50%—talk about a return on investment! -
Scalable Business Model
Scaling a financial planning business is relatively straightforward.
As your client base grows, you can expand by hiring additional financial advisors or by offering more specialised services, like tax consulting or estate planning.
Plus, thanks to digitalisation, you’re no longer bound by geography—virtual financial planning is on the rise, allowing you to serve clients nationwide, or even globally.
In 2022, nearly 25% of financial planners in Australia reported using virtual advising models, and that number is expected to grow as clients become more comfortable with online consultations.
Scaling digitally also significantly reduces overhead costs. -
Strong Industry Growth
Australia’s financial planning industry is thriving, with more Australians seeking professional advice on everything from superannuation to investment strategies.
With an aging population and increasingly complex financial products, the demand for personalised advice is growing steadily.
The industry is projected to expand by 2.7% annually over the next five years, making it a solid long-term investment.
Australians collectively have over AUD $3.3 trillion invested in superannuation funds. As retirement planning becomes more critical, the role of financial advisors will become even more essential. -
Recession-Resistant Industry
While many industries suffer during economic downturns, financial planning tends to remain robust.
During tough times, individuals and businesses seek expert advice to navigate uncertainty, reassess their portfolios, and make decisions that safeguard their future.
Whether it's rebalancing investment portfolios or adjusting savings strategies, financial planners are needed more than ever during economic turbulence.
Even during the 2008 Global Financial Crisis, financial planners in Australia saw increased demand as clients sought guidance on how to protect their wealth and minimise losses. -
High Client Retention Rates
Financial planning is all about relationships, trust, and personal service. Once clients establish a rapport with a financial advisor, they tend to remain loyal—often for decades.
This results in high client retention rates, which is great news for your bottom line.
People are hesitant to switch financial advisors due to the deep trust they build over time, making long-term client relationships a cornerstone of financial planning businesses.
On average, financial planners in Australia retain around 90% of their clients year over year, with some firms boasting retention rates as high as 95%. -
Flexible Work Environment
The digital age has transformed the way financial planners operate.
With robust financial software and virtual meeting platforms, many firms have embraced flexible working arrangements.
This means you can run your business from virtually anywhere—whether you prefer a home office or a more traditional setup.
Remote advisory services have become more common, and clients are increasingly comfortable managing their finances through digital platforms.
A 2021 study found that 70% of Australians are open to receiving financial advice virtually, giving you the flexibility to run your business wherever you want—
whether it’s from Bondi Beach or the heart of Melbourne. -
The Ability to Make a Positive Impact
Owning a financial planning business isn’t just about making money—it’s about helping others make the most of theirs.
Financial planners play a critical role in shaping the future of their clients, helping them achieve financial security, build wealth, and navigate life's big decisions,
such as buying a home, retiring comfortably, or leaving a legacy for their children.
If you enjoy working with people and making a positive impact, financial planning offers a highly rewarding career path.
73% of Australians feel that receiving financial advice makes them more confident about their financial future. That’s the kind of impact you can make every day!
What Prices Do Financial Planning Businesses Typically Go For?
The price of a financial planning business in Australia can vary greatly depending on several factors, including the size of the firm, location, services provided, and the strength of the existing client base.
If you're considering investing in this industry, understanding the price range and what you get at each level is key to making an informed decision.
Here’s a breakdown based on current listings from BusinessForSale.com.au to give you a clearer idea of what to expect:
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Small-Scale Financial Planning Firms
Price Range: AUD $50,000 - $300,000
Small financial planning firms typically serve individuals and small business clients, focusing on essential services like retirement planning, basic investment advisory, and superannuation.
These firms often operate with one or two financial planners and cater to a local client base.
For first-time buyers or independent financial planners looking to break into the market, small-scale firms offer a manageable entry point with plenty of room for growth.
Australia has over 15 million superannuation accounts, and small financial planning firms often help manage these, providing tailored advice to individuals as they prepare for retirement.
With a growing aging population, even small firms are primed for steady demand. When looking at small firms, consider those with room for growth.
If the current owner hasn’t fully leveraged digital tools, such as online client management or virtual advisory services, there’s potential to boost profitability with minimal investment in technology. -
Mid-Sized Financial Planning Firms
Price Range: AUD $300,000 - $1.5 million
Mid-sized financial planning businesses serve a broader range of clients, including high-net-worth individuals, and offer a more comprehensive suite of services,
such as estate planning, investment management, and tax advisory.
These firms often have several financial planners, more sophisticated financial software, and a more established brand within their region.
As of 2023, the average financial planning client in Australia has an investable wealth of around AUD $600,000.
Mid-sized firms often attract clients with significant assets, leading to higher advisory fees and more lucrative, long-term relationships.
Mid-sized firms offer a great balance between manageable operations and the potential for high profitability.
Look for firms with long-term client contracts and established relationships with high-net-worth clients, as this will provide consistent revenue.
Additionally, explore whether the firm has embraced modern financial technology to streamline operations and enhance client service.
Investing in tech upgrades, if not already done, could significantly boost your firm’s efficiency and profitability. -
Large-Scale Financial Planning Firms
Price Range: AUD $1.5 million - $5 million+
At the top end of the market, large-scale financial planning firms cater to wealthy individuals, corporate clients, and even international investors.
These businesses typically offer a full suite of financial planning services, including wealth management, corporate advisory, estate planning, and complex tax strategies.
With multiple office locations, a large team of financial planners, administrative staff, and state-of-the-art financial management systems, these firms are the pinnacle of the industry.
In 2022, Australians held over AUD $1.8 trillion in investable assets.
Large financial planning firms help manage a significant portion of this wealth,
offering tailored strategies to ultra-high-net-worth individuals and businesses, making them highly lucrative operations.
Large-scale firms come with a higher price tag, but they also offer instant credibility, an established brand, and premium clients with recurring contracts.
If you’re considering such an investment, focus on firms that have diversified their revenue streams—
offering not just financial advisory services, but also estate planning, tax minimisation strategies, and corporate consulting.
Also, look for firms with long-standing client relationships and robust contracts, as these provide steady, high-value revenue streams.
Maximising Your Investment: Tips for Buyers
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Look for Growth Potential Whether you’re buying a small or mid-sized firm, consider the growth potential.
Some businesses may not have fully embraced modern financial technologies, like robo-advisors or comprehensive CRM systems, which can streamline operations and attract a tech-savvy clientele.
Investing in these tools post-purchase can boost productivity and increase client satisfaction, ultimately driving profitability. -
Assess Client Contracts A key factor in the valuation of a financial planning business is the nature of its client contracts.
Look for firms with long-term, recurring client agreements, as these provide stable and predictable revenue.
Businesses that rely on one-off consultations are riskier and require more effort to maintain consistent cash flow.
According to industry reports, financial planning firms that focus on ongoing service models tend to have 25% higher client retention rates. -
Leverage Location for Premium Pricing Location matters in the financial planning industry.
Firms based in high-wealth areas, such as Sydney’s Eastern Suburbs or Melbourne’s affluent Toorak district, typically attract higher-net-worth clients,
which means more lucrative service contracts and the ability to charge premium fees.
When evaluating a firm’s price, consider the wealth demographics of its client base, as this directly impacts profitability. -
Invest in a Niche Specialised financial planning services,
such as those focused on estate planning for high-net-worth families or corporate advisory for large businesses, often command higher fees and face less competition.
Look for firms that have established themselves in a profitable niche, as this can offer a significant competitive edge and increase profitability.
For example, firms that specialise in SMSF (Self-Managed Super Funds) often see higher demand due to the complexity and personalised nature of these services.
Whether you’re looking to invest in a small, mid-sized, or large financial planning business, the industry offers a variety of opportunities for profitability and growth.
Understanding the unique dynamics of each market segment—
such as recurring revenue models, client demographics, and growth potential—will help you make an informed decision and maximise your return on investment.
Whether you’re looking for a manageable boutique firm or a large-scale operation with national reach, there’s a financial planning business out there that fits your goals.
Franchise vs. Independent: Which Should You Choose?
When buying a financial planning business, one of the most important decisions you’ll make is whether to invest in a franchise or an independent firm.
Both routes offer distinct advantages and challenges, depending on your experience, preferences, and business goals.
Let’s explore the pros and cons of each option within the financial planning industry to help you make an informed decision.
Franchise Financial Planning Business
Franchise models in the financial planning industry can offer a ready-made framework for success, particularly for those new to the field or looking for a structured entry point.
With established brand recognition, operational systems, and ongoing support, buying into a franchise can simplify many of the hurdles faced by independent business owners.
Pros:
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Brand Recognition
One of the biggest draws of joining a franchise is the immediate credibility that comes with an established brand.
This can be especially beneficial in financial planning, where trust is paramount.
Clients tend to feel more secure working with a firm they recognise, knowing that a larger, well-known brand backs the advisor.
If you’re new to the industry or if your local market is highly competitive, the name recognition alone can give you a substantial head start in attracting clients. -
Training and Support
Franchises often provide comprehensive training programs that cover everything from the basics of financial planning to advanced client relationship management.
This support can be invaluable for first-time business owners or financial advisors who want to ensure they’re operating within the latest regulatory frameworks.
Ongoing training may also be provided as part of the franchise agreement, keeping you and your team updated on industry changes, product innovations, and regulatory requirements. -
Proven Systems
The franchise model comes with established systems for business operations, client management, and marketing strategies.
From ready-made client relationship management (CRM) software to marketing templates, you won’t need to reinvent the wheel.
This means you can hit the ground running without spending months setting up processes from scratch.
Cons:
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Franchise Fees
One of the trade-offs for brand recognition and support is the ongoing fees you’ll pay for using the franchise’s systems and name.
These typically include both royalty fees and marketing levies, which can take a substantial cut from your profits.
Depending on the franchise, these fees can range from a percentage of your revenue to flat monthly charges, making it crucial to evaluate how much these costs will impact your bottom line. -
Limited Flexibility
Operating a franchise often comes with strict guidelines, which can limit your flexibility.
You may have restrictions on the types of financial products you can offer, the way you structure your fees, or even the marketing strategies you employ.
While the systems are designed to streamline operations and ensure consistency across the brand,
they can also prevent you from adapting quickly to changes in the market or tailoring services to meet the specific needs of niche clients.
Independent Financial Planning Business
If you prefer autonomy and creative control over your business, buying or starting an independent financial planning firm could be the ideal route.
Independent firms allow you to build a personalised brand, cater to niche markets, and operate with complete flexibility in services and operations.
Pros:
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Full Control
As an independent financial planner, you have the freedom to set your own pricing, develop customised service offerings, and tailor your business to meet the specific needs of your clients.
You can quickly pivot to adopt new financial tools, trends, or investment products, staying agile in a fast-evolving industry.
Full control also means you can craft a brand identity that resonates with your target market,
whether it’s focusing on high-net-worth individuals, small businesses, or emerging sectors like sustainable investing. -
No Franchise Fees
Without the obligation to pay franchise royalties or fees, you keep all the revenue your business generates.
This gives you more financial flexibility to reinvest in your business,
whether that’s expanding your service offerings, upgrading your technology, or spending more on marketing to grow your client base.
Over time, the lack of ongoing franchise costs can lead to significantly higher profit margins, particularly if you build a strong, loyal client base. -
Tailored Services
Independent financial planning firms can design bespoke services that set them apart from the competition.
Whether you want to cater specifically to retirees, small business owners, or families with complex financial needs,
you have the freedom to create packages that speak directly to these demographics.
This ability to personalise your offerings can lead to stronger client relationships and higher client retention rates.
Cons:
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Brand Building
Starting or buying an independent firm means you won’t have the immediate brand recognition that comes with a franchise.
Building your brand from scratch can be time-consuming and may require a significant investment in marketing and client acquisition strategies.
Establishing trust with clients in the financial planning sector is crucial, and without a recognised brand,
it may take longer to attract a steady stream of clients, especially if you’re new to the industry. -
No Corporate Support
Running an independent financial planning firm means you’re responsible for everything—
from navigating compliance regulations to managing payroll, hiring staff, and implementing the right technologies.
There’s no corporate safety net to fall back on, and the learning curve can be steep, particularly if you’re managing both the business side and serving clients.
You’ll need to ensure you’re on top of licensing requirements, industry updates, and administrative tasks, all while growing the business.
Who Are the Largest Franchisers in Australia's Financial Planning Industry?
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Insignia Financial
Sub-Brands: MLC Advice, Bridges, OnePath Custodians
Market Share: 10.4%
Revenue: AUD 568.1 million
Insignia Financial has rapidly expanded its wealth management business, acquiring ANZ’s OnePath and MLC from NAB.
Following these acquisitions, Insignia now holds a significant share of the financial advice market, focusing on superannuation and digital advice.
In 2023, the company spun off its self-employed advisers, boosting its profitability. -
AMP
Sub-Brands: AMP, AMP Advice, Hillross Financial Services
Market Share: 9.8%
Revenue: AUD 538.1 million
AMP’s network is under pressure from regulatory reforms, including the fallout from the Financial Services Royal Commission.
In response, AMP has divested non-core businesses, such as Collimate Capital’s real estate arm, but faces challenges with its fragmented adviser network and recent legal disputes. -
NAB
Sub-Brands: UBank, Bank of New Zealand
Market Share: 1.8%
Revenue: AUD 98.8 million
NAB has strategically shifted towards business lending and digital banking, divesting international and wealth management operations.
Its acquisition of Citigroup’s Australian consumer banking business has expanded its credit card offerings, but competition remains fierce.
NAB’s digital focus is reflected in its online-only platforms, UBank and 86 400, as it strives to meet changing consumer demands. -
ANZ
Sub-Brand: ANZ Plus
Market Share: 0.4%
Revenue: AUD 20.1 million
ANZ continues to streamline operations, focusing on core markets and institutional banking.
The bank has divested its wealth management arm and is currently battling regulatory hurdles in its attempt to acquire Suncorp Bank.
Its new digital platform, ANZ Plus, is designed to compete with neobanks, lowering operational costs and attracting new customers.
Which Should You Choose?
Deciding between a franchise or independent financial planning business largely depends on your personal goals and risk tolerance.
Go for a franchise if you’re looking for a structured approach with built-in brand recognition, established systems, and ongoing support, especially if you’re new to the financial planning industry.
Franchises can offer a “turnkey” solution, allowing you to start generating revenue more quickly, but at the cost of less operational flexibility.
Opt for independence if you prefer the freedom to create a bespoke business tailored to your clients’ needs and are willing to invest time in brand-building.
Independent ownership offers complete control over your services and pricing, higher profit margins without franchise fees, and the ability to specialise in niche areas,
though it requires more effort in building up a client base and managing operations.
Both paths have proven to be successful in the financial planning industry—it’s all about finding the right fit for your skills, ambitions, and vision for the future.
What Will Your Major Costs Be?
Wage Costs Decline as Technology Steps In
Wages are historically the largest expense for financial planning firms, but the growing adoption of technology is reshaping the industry.
Platforms like Netwealth streamline financial processes, reducing manual tasks and trimming wages as a share of revenue.
Labour reforms following the 2023 Quality of Advice Review are set to further cut document requirements, freeing up advisors’ time and reducing wage pressures.
Australia’s Advice Gap Squeezes Profits
Although financial advice is in high demand due to high interest rates and inflation, rising living costs have made services unaffordable for many Australians, affecting advisory profits.
Regulatory fees from the Financial Services Royal Commission have added to the burden, although M&A activity has helped larger firms cut costs.
However, firms catering to high-net-worth individuals have fared better, seeing revenue growth despite broader profit declines.
Depreciation Rises as Digital Investment Grows
With the industry’s push toward digital advice, depreciation expenses on IT systems are becoming a significant cost.
Cybersecurity, in particular, requires continuous investment to protect sensitive client data, while robo-advice and automated platforms also drive depreciation.
As digital platforms become more prominent, firms can expect these costs to continue rising in the coming years.
Common Potential Problems Encountered by Buyers of Financial Planning Businesses
Before diving headfirst into the world of financial planning, it’s critical to be aware of the potential challenges that come with owning and operating a business in this sector.
While the rewards can be significant, so too can the risks. Understanding the most common pitfalls will help you make an informed decision and protect your investment.
Here are nine key problems you might encounter when buying a financial planning business:
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Client Retention Post-Ownership Transition
One of the biggest concerns when taking over an existing financial planning business is the potential loss of clients during the ownership transition.
Financial planning is built on trust, and clients may feel anxious about the change in leadership, fearing that service quality or personal rapport might diminish under new ownership.
For example, if you’re inheriting a firm with a portfolio of high-net-worth individuals, losing just a few of these key clients can lead to a significant revenue drop.
Studies show that client churn rates can increase by 10% to 20% during an ownership change, especially if clients feel their concerns aren’t adequately addressed.
You’ll need to ensure a smooth handover by retaining key staff, maintaining consistent communication, and offering personalised reassurance. -
Navigating Regulatory Compliance and Licensing
Financial planning in Australia is heavily regulated by the Australian Securities and Investments Commission (ASIC).
Whether it's compliance with the Corporations Act 2001, holding an Australian Financial Services Licence (AFSL),
or meeting the strict Financial Adviser Standards and Ethics Authority (FASEA) requirements, regulatory oversight is significant.
Failing to adhere to these standards can lead to penalties, suspensions, or even the closure of your business. -
Constantly Changing Financial Regulations
The financial world is in a constant state of flux, with new superannuation regulations, tax laws, and investment policies being introduced regularly.
Financial planners must stay on top of these changes to offer accurate advice.
A failure to keep up with evolving laws could result in giving poor financial guidance, which could lead to legal repercussions and reputational damage.
On average, financial planners in Australia must complete 40 hours of Continuing Professional Development (CPD) annually.
Ensure that the business you’re purchasing has a strong system for ongoing education and compliance with these changing regulations. -
Technological Lag and Digital Transformation
In today’s competitive market, clients expect digital services like online portals, virtual consultations, and easy access to financial reports.
Unfortunately, many older financial planning firms are still using outdated systems for managing portfolios and client information.
Bringing these firms up to speed with modern, cloud-based financial planning tools can be a costly and time-consuming process.
Before purchasing, assess the firm’s existing technology infrastructure.
If the systems are outdated, factor in the cost of upgrading to the latest financial software and ensuring a seamless digital experience for your clients.
According to recent studies, firms that embrace digital transformation experience a 30% higher client satisfaction rate. -
High Turnover of Financial Advisors
Retaining key talent is critical to the success of any financial planning business.
Clients often stay with a firm because of the strong relationships they’ve built with their advisors.
However, high turnover among advisors can disrupt these relationships, leading to client dissatisfaction and possibly client loss.
This is especially concerning if the departing advisors are leaving to join a competitor, potentially taking clients with them. -
Intensely Competitive Market
The financial planning industry is highly competitive, particularly in urban areas where numerous firms are vying for the same clients.
Without a clear differentiator, it can be difficult to stand out from the crowd and attract new clients.
Additionally, larger firms with more resources may be able to undercut smaller, independent firms on pricing, making it harder to compete.
There are over 15,000 registered financial planners in Australia, meaning competition is fierce.
If the firm you’re buying doesn’t have a unique value proposition—such as specialising in niche markets like ethical investing or estate planning—it may struggle to maintain or grow its client base. -
Impact of Economic Downturns
While financial planning is often considered recession-resistant, the reality is that during severe economic downturns, clients may cut back on discretionary services, including financial advice.
Moreover, market volatility can negatively affect clients' investment portfolios, reducing the fees generated from assets under management (AUM). -
Client Expectations for Personalised and Digital Services
Today’s clients expect more than just basic financial advice.
They want personalised, holistic financial planning that covers everything from tax strategies to retirement, insurance, and estate planning.
Balancing this high level of personalisation with scalable operations can be tricky, especially for firms serving a large number of clients.
Furthermore, with the rise of robo-advisors and digital financial tools, clients increasingly expect digital convenience alongside personalised advice.
The Australian digital wealth management market is expected to grow by 18% annually, with many clients preferring hybrid solutions that combine digital platforms with human advisors.
If the firm you’re purchasing hasn’t embraced these new technologies, you could be at risk of losing clients to more tech-savvy competitors. -
Potential for Client Misalignment
When acquiring a financial planning business, there’s always the risk that the current client base may not align with your approach or expertise.
For example, if the firm specialises in high-net-worth clients and you’re more accustomed to working with younger professionals or small business owners, the transition could be rocky.
Aligning your services with the needs and expectations of the existing client base is crucial to a smooth handover.
While buying a financial planning business can be a rewarding and profitable investment, it’s not without its challenges.
From navigating regulatory hurdles and ensuring client retention to keeping pace with digital transformation and meeting client expectations, there are numerous factors to consider.
Careful due diligence is key—ensuring that the firm’s clients, staff, and systems align with your vision will set the foundation for long-term success.
Key Questions to Ask When Buying a Financial Planning Business
Making a well-informed purchase is essential when acquiring a financial planning business.
Asking the right questions can uncover hidden risks, highlight growth opportunities, and protect your investment. Here are the critical questions you should ask:
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What is the client retention rate?
A high client retention rate signals a stable and loyal client base, crucial for consistent revenue and growth.
Ask for client retention data over the last 3-5 years, along with contract renewal rates and key performance indicators related to client churn. -
What are the firm’s primary revenue-generating services?
Understanding the most profitable services—be it investment management or retirement planning—helps identify the firm's strengths.
Ask for a breakdown of revenue by service type over the past few years, along with trends in demand. -
How does your firm market its products to clients?
Marketing is critical to maintain profitability and client growth.
Ask for details about how the firm targets its core audience and the effectiveness of its strategies.
Reviewing marketing plans and customer feedback will provide insight into its reach. -
How do your firm's online platforms compare with those of its competitors?
Digital platforms are becoming a key differentiator, particularly for younger investors.
Assess the firm's online presence and request a comparison of its platforms with those of competitors to understand its digital capabilities. -
How many clients are under long-term contracts, and what are their terms?
Long-term contracts provide a stable income stream.
Request detailed information on the length, renewal terms, and services covered under these contracts.
Be sure to examine any exit clauses or potential risks within these agreements. -
What market research does your company undertake?
Market research is essential to adapt to industry changes like the Future of Financial Advice reforms.
Ask for insights on the firm’s understanding of market trends, competition, and evolving client needs. -
What technology and software does the firm use?
Up-to-date software ensures efficient operations, while outdated systems can drive up costs.
Request a detailed list of the technology and software used, including upcoming upgrades or licensing fees, and assess their efficiency. -
Is the firm in compliance with regulatory standards?
Regulatory compliance is crucial to avoid fines or legal issues.
Request ASIC registration, AFSL details, recent audit reports, and any ongoing legal or regulatory issues to ensure there are no red flags. -
How does your company ensure that its workforce is appropriately qualified?
Ensuring the team has the necessary qualifications, such as upcoming FASEA requirements, is key.
Ask about professional development programs and qualifications over the next five years to maintain service quality. -
What is the structure of the current team, and what are their qualifications?
Understanding team dynamics is vital for maintaining service quality. Ask for an organisational chart detailing roles, qualifications, and tenure.
Review employee contracts, especially regarding retention and non-compete clauses. -
To what extent does your company rely on business from customers aged over 50?
Older clients represent a significant source of revenue due to retirement planning needs.
Ask about the percentage of clients over 50 and the firm’s strategy for maintaining and expanding this client base. -
How does the firm handle client transitions during ownership changes?
Client retention during an ownership change is crucial.
Ask about past transitions, including communication strategies and retention efforts.
Request client feedback from previous transitions to gauge the firm's success in maintaining relationships. -
Are there any outstanding liabilities or debts?
Inheriting significant liabilities can impact profitability.
Request a full financial report, including outstanding debts and any legal or financial disputes that may affect future earnings. -
What growth opportunities exist for the business?
Knowing the potential for future expansion—whether through untapped markets, new service lines, or digital platforms—will help assess the firm’s growth potential.
Request strategic plans and market research to evaluate these opportunities. -
What does the competitive landscape look like in the local area?
Understanding the competition is vital for growth.
Ask for a competitive analysis and details about how the firm differentiates itself in the local market.
Review customer feedback on why clients choose their services over others.
These questions will help you gather the critical information needed to make an informed decision when purchasing a financial planning business.
Final Thoughts: Your Future, Financially Planned
Buying a financial planning business is more than just an investment—it’s your chance to become the architect of other people's financial futures while securing your own.
As the legendary investor Warren Buffett said, "Someone is sitting in the shade today because someone planted a tree a long time ago."
By acquiring a financial planning firm, you're not only planting the seeds for long-term wealth but also providing invaluable guidance to clients who trust you with their financial dreams.
Plus, with Australians now seeking more personalised advice in an ever-complex financial landscape, the demand for financial planning has never been higher.
Imagine yourself not just managing spreadsheets but becoming a trusted advisor, helping people navigate everything from their first home purchase to their retirement goals.
And here’s a fun fact: A whopping 91% of Australians are financially unprepared for retirement—think of the lives you’ll change by stepping in! So why wait?
As they say, "The best way to predict your future is to create it." Now's your chance to plan your own financial empire and leave your mark on the world—one investment at a time.
Ready to take control of your future?
It’s time to "make cents" of your ambition and start building your financial planning empire today!