Advice firms are switching off ongoing fees for some clients as they adapt to changing client needs, a new report from NextWealth has revealed.
NextWealth’s Financial Advice Business Benchmarks report surveyed 318 financial advice professionals to explore changes to client service, growth, people, technology, investment and fees.
It found nearly half (44%) of firms have turned off ongoing fees for clients who no longer fit as they seek to create a balance between client need, adviser capacity and economies of scale.
The report showed that the decisions firms are making about existing clients are increasingly being informed by a more explicit understanding of what different relationships cost to serve. Two in five (40%) advice firms said they have reviewed the cost to serve a typical client over the past 12 months and 33% have moved clients to another proposition or adviser, while 20% have increased fees for clients who no longer fit the current model.
Half of firms are also segmenting their clients by life stage and nearly a third (32%) by complexity, suggesting that service design is being built around more than portfolio value.
A fifth (22%) of advice professionals say developing new propositions or client segments is a major driver of change and 34% currently offer, are developing or refer clients to some form of digital or lower-touch proposition.
In addition, 37% are offering or developing a simplified advice service and 23% currently offer or are considering offering targeted support.
Growth ambitions
The report found that ambition remains high, with nearly two thirds (64%) of firms planning to grow by taking on new clients. Almost half (49%) of advisers are serving more clients than a year ago – the highest proportion recorded since 2021 – and 70% expect adviser headcount to rise at their firm, while 47% also expect paraplanner numbers to increase.
The findings show that organic growth remains the most dominant ambition, with 47% of respondents citing growth from new or existing clients as a major driver of change and 53% planning to grow by increasing assets from existing clients.
The benchmark found the average adviser now oversees 88 clients with an average portfolio size of £536,904, alongside average minimum fees of £1,949 for initial advice and £1,935 for ongoing advice per year.
Referrals still provide the most new clients, with 56% of those surveyed saying new clients come from existing client and family referrals, although this figure is down from 67% in 2025.
Emma Napier, consulting director at NextWealth, said: “The question running through this year’s benchmarks is what kind of growth financial advice firms are creating. Most firms want more clients. They are adding tech and tools while also hiring people to support that growth.
“These firms are also making deliberate decisions about which clients fit their ongoing service model. They are delivering sustainable growth while meeting client needs. For some, this means turning off ongoing fees for some clients, moving others to different propositions and charging models.
“This means a firm can be expanding one area of the business and tightening in another at the same time. Those decisions increasingly come from an explicit examination of what different clients cost to serve.”
Growth of AI
NextWealth said AI is increasingly becoming part of the advice relationship, with meeting notes and summaries the most common use case.
More than half (54%) of advice firms say technology, cyber security and data improvements are a leading driver of change at their firm, with 47% now using AI.
The benchmark revealed that clients are also using it to test questions and recommendations between meetings through general purpose AI.
While this can make them better informed, NextWealth warned it can also introduce errors and the role of adviser now includes explaining where AI might fall short and helping the client decide what to trust.
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