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CWC Research: How to build a successful advice firm post-RDR


CWC Research has published a study into how small and medium sized advisers can create a successful post-RDR business.

The report, No small change: Benchmarking the adviser business, commissioned by Funds Network, predicts the average adviser salary will stand at £50,000 plus bonuses with revenues of up to £400,000.

The study says adviser salaries should make up around on-third of the total wage bill, with 1.5 paraplanners per adviser on an average salary of £30,000 plus bonuses.

The average adviser will have 100 to 150 clients with revenues between £150,000 and £400,000 and an expected 5 per cent growth per annum for the next three years.

In the CWC model, an average adviser will have 25 chargeable hours to clients per week and advisers will work to an hourly rate of between £150 to £200. Average clients are expected to pay retainer fees of between £50 and £200 each per month.

On adviser charging, the study says advisers should log the time spent advising clients and assess which are profitable. Advisers should also have model communications with clients and stress test the impact of falling markets or an ageing client bank.

The report examines the cost of acquiring new clients and says firms will spend on marketing, seminars, direct mailing, professional referrals and first meetings to build up their client bank.

CWC recommends budgeting for acquisition costs, measuring the success of marketing initiatives all with the aim of breaking even within the first year of acquiring a client.

When advising clients on investments, the report says advisers should start with explaining the costs and undertake a cost-benefit analysis before sourcing the best provider.

CWC Research managing director Clive Waller says: “The successful adviser business will be curious and will want to continue the process of their evolution. It is the purpose of this paper to try and see what good will look like in the coming months and years.”

CWC Research


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