Advisers will need to halve their fees and focus on serving mass market clients as there are not enough high-net-worth clients to support the industry, according to Deloitte.
A research paper published by the accountancy firm claims there are not enough clients with £200,000 investable assets and above to sustain the current adviser community.
The paper says: “Advisers could do better by focusing on tailoring propositions to the different segments and increasing efficiencies throughout the whole sales funnel.
“Reducing annual servicing cost per client from £1,000 to £500 would allow advisers to profitably serve clients with less than £100,000 in investable assets.”
The paper also states that current charges based on typical investment cases suggest financial adviser fees are more expensive than that of banks.