Last year we turned away a 34-year-old teacher with $180,000 in super, a mortgage, a new baby and a genuinely good question about whether to salary sacrifice or pay down debt faster.
She wasn't a bad prospect. She was a bad fit for a $6,600 engagement. So we did what most practices do, gave her twenty minutes of general information, wished her well, and watched her walk out with the question unanswered.
That's a decision every practice principal makes weekly. What we rarely do is add up what it costs.
The maths that made the minimum
None of this is a marketing failure. It's structural.
Adviser numbers sat above 26,000 before the Royal Commission. As of this month, the Financial Adviser Register shows a shade over 15,100. Padua's Wealth Data projects roughly 14,800 by 2030, which is to say, the middle-case scenario is that this doesn't recover.
At the same time, cost-to-serve has gone one direction. Education standards, the exam, professional year requirements, PI cover, compliance overhead, the documentation burden on a single piece of advice. Every one of those is defensible. Together they set a floor under what an advice engagement can profitably cost, and that floor is now well above what a large slice of the population can pay.
So we did the rational thing. We raised our minimums. And in doing so, the profession quietly redefined its addressable market as people who already have money.
Three options, and two of them are bad
Every practice sitting on this problem has three choices.
Raise the minimum and accept the loss.
Clean, honest, and what most of us have done. The cost is invisible because it walks out the door before it becomes a client, so it never appears in a report.
Serve them anyway, unprofitably.
The favour model. It works until it doesn't, and what it usually produces is a service standard you can't sustain and a resentment you can't voice. Worse, unprofitable clients don't get worse service in theory. They get it in practice, when the annual review slips to fifteen months.
Build something below the threshold that doesn't consume adviser hours.
Harder. Also the only one that survives contact with the next decade.
What a lower tier actually looks like
The critical constraint is the one people skip past, it cannot draw on adviser time. The moment a licensed adviser is in the room, you've reintroduced the cost structure you were trying to escape.
That means the tier is built from things that scale, digital tools, structured education, and a coaching-style engagement that helps people make their own decisions rather than making decisions for them.
In our practice that meant bundling a client portal with a digital advice engine and wrapping a coaching relationship around it. The client gets somewhere to see their whole position, a tool that answers the mechanical questions, and a human who holds them accountable to the plan they build. What they don't get is personal advice, and they know it from the first conversation.
Yours will look different. The principle holds regardless: the value is structure and accountability, not recommendation.
Where this gets dangerous
Here's the part that should make you cautious, and it's the reason a lot of practices never build the tier at all.
The line between general and personal advice is not a marketing distinction. It's a licensing one, and it is very easy to cross by accident when a warm, capable person sits across from a client who is asking for help.
We spent more time on this than on anything else. What we landed on was three things.
First, the boundary is documented before anyone is onboarded, what the service is, what it isn't, and what triggers a referral into full advice. Not a disclaimer at the bottom of an email. An actual scope document the client acknowledges.
Second, the people delivering it are trained on the specific moments where the line gets crossed. It is almost never "should I buy this share." It is "what would you do?", asked casually, near the end of a good conversation, by someone who trusts you.
Third, someone with compliance responsibility signs off before it goes live, and reviews it after. If your responsible manager hasn't stress-tested the tier, you don't have a tier. You have an exposure.
I say this as someone who came out of licensed advice and now operates deliberately on the coaching side of that line. It is workable. It is not casual.
The shift most principals miss
The tier is not a charity, and it is not a loss leader you tolerate for goodwill.
It's a pipeline with revenue attached.
Run the numbers on the enquiries you declined in the last twelve months. Not the tyre-kickers, the real ones, with a real question and no capacity to pay $6,000 to have it answered. Now note their average age.
If that number is meaningful and the average age is under 45, you've spent a year handing your next decade of clients to whoever bothers to answer them. Some of those people will inherit. Most of them will earn more. Nearly all of them will refer, and people refer sideways to their own demographic, which is exactly the cohort your business will need when your current book starts drawing down.
The 34-year-old teacher isn't a small client. She's an early one. The distinction matters enormously and almost nobody's CRM records it.
Start here
You don't need to build a product this quarter. You need three numbers.
How many enquiries you declined in the last twelve months. Their average age. And the average time your team spent on each one before saying no, because that cost is already on your P&L, whether or not anything came back for it.
If those three numbers make you uncomfortable, you don't have a marketing problem. You have an unserved market sitting inside your own enquiry log, and you're currently paying to turn it away.
What would it take to answer them properly?
Conrad Francis, Founding Director, Inspired Money
