Yesterday we published the sixth update to our Financial Advice Business Benchmarks (FABB) report. We do this report for free every year to give back to the financial advice community. It’s a fantastic resource based on a survey of 340 financial advice professionals and covers future business plans, staff mix, fees and charges, tech, confidence and more.

There are three things that stood out to me from this year’s report.

1. Confidence

Financial advice professionals have high confidence in the service they provide to their clients but are much less impressed by some issues that are not in their immediate control.

High confidence

• 92% are confident in their firm’s ability to deliver good value for money
• 89% are confident in their ability to meet the advice needs of clients

Low confidence

• 26% are confident in the capability of the regulator
• 46% are confident in the stability of the economy

One area where confidence is more middling is in tech innovation to make life easier for financial advice professionals. Only 56% are fully confident in technology innovations to make their lives easier.

2. Efficiency of delivery of advice

Speaking of efficiency… since 2019 we’ve been collecting data to illustrate the efficiency of delivery of financial advice. This year’s report highlights that there has been no meaningful improvement in the time taken to deliver advice to new clients.

Despite new ways of working and huge advances in tech, it still takes an average of 33 days to deliver the first piece of advice to a new client.

We’ve been banging the drum of integrations since I set up NextWealth nearly seven years ago. We launched our AI Lab to help firms drive efficiency, expand access to advice and improve job satisfaction. While tech can make advice businesses more efficient, these firms rely on providers to share data. One of the biggest lags in delivering advice is getting data from providers. Any amount of tech investment from financial advice firms won’t move the needle on that.

3. Organic growth

This year’s survey reveals a greater focus on organic growth.

• Taking on new clients: Over two thirds of respondents say their firm is looking to grow by taking on new clients, up from 50% last year.
• Hiring staff: 40% of firms plan to grow by hiring new staff, nearly double the share compared with last year.

At NextWealth we’ve written a lot about consolidation of advice firms. This report takes a closer look at growth firms – those looking to grow organically – to understand what makes them different.

• Growth firms are more likely to refer to client-facing staff as financial planners: 59% call their client-facing staff ‘financial planners’ compared to 33% for the rest of the market.
• They are also more likely to have a CIP, to be looking to hire client service staff and to be planning changes to their tech stack.

Thanks to the financial advice professionals who contribute to our research. This report is for you and it is available for free to download from our website (click here).

Heather