Macquarie: Adviser profit margin 'dangerous' if below 20%

John Baxter, who runs the multi-national’s division to transition IFA firms for the RDR, says a profit margin of less than 30% is “inadequate”, and less than 20% is “dangerous”. But he calculates more than half of the sector is loss-making or has a profit of less than 5%. He told delegates at the Personal Finance Society (PFS) conference most IFA businesses do a great job for clients and staff but a “woeful” job for their companies’ ­profitability. “You need to view profit as an essential cost of your business, on the same side as staff wages and the rent. If you are not profitable yo...