“We control our own destiny,” Quantum Financial principal Claire Mackay told ifa.
“There are obviously obligations that come with having your own license, but we decide the direction of our firm and we decide how we provide a service to our clients,” Ms Mackay said.
While the company obtained its licence years ago, the fact that they continue to hold one is an important proposition for clients, Quantum Financial principal Tim Mackay said.
“From our clients perspective it means they can be sure that the advice they are getting is not being influenced by a product provider parent,” Mr Mackay said.
“It is all about providing advice that’s in their best interests without the taint of a larger organisation,” he said, adding that the AFSL means allows Quantum to be completely transparent in its service offering.
“The fees are transparent and fixed, up front,” Mr Mackay said.
“There are none of those volume bonuses or any of that stuff, that’s a given,” he said, “but the fact that there are no links to product providers, that is a big value-add from our clients’ perspective.”
Quantum Financial was established in 1994 by senior wealth advisor Bill Mackay and remains a boutique family business.
[quote name=”Philip Carman”]Yes, George, it’s a pain paying for cover that you should never need, but if you keep your practice really safe and totally unconflicted the risk is low and so are the premiums (at least so far… about $7kpa. The price of freedom is not just eternal vigilance, but also PI cover, some assistance (I employ a compliance consultant at about $10kpa)and Audit (another $6kpa) plus statutory costs (I think around $5kpa) so for about $25-30kpa you’re away. Say it quickly and it won’t seem as much. It sure beats being told what to do by people who know less than you and whose ethics you’d prefer NOT to adhere to…[/quote]
Thanks for reply Philip.Are you located in Sydney? If so can you recommend a PI company for us to contact. I am a sole adviser and my AFSL (sublicence fees) went up $3600 this last 12 months and they are blaming it on PI. I would appreciate any direction.
George
Yes, George, it’s a pain paying for cover that you should never need, but if you keep your practice really safe and totally unconflicted the risk is low and so are the premiums (at least so far… about $7kpa. The price of freedom is not just eternal vigilance, but also PI cover, some assistance (I employ a compliance consultant at about $10kpa)and Audit (another $6kpa) plus statutory costs (I think around $5kpa) so for about $25-30kpa you’re away. Say it quickly and it won’t seem as much. It sure beats being told what to do by people who know less than you and whose ethics you’d prefer NOT to adhere to…
to Philip Carman:
I think the PI insurance costs can be prohibitive to obtaining ones own AFSL. I have a friend who just got his AFSL who said that its the PI insurance costs thats killing him.
After reading the financial press and caselaw for the past few years, you might believe that any adviser that wants to be more than a product distributor should have their own AFSL (or be a representative of a non-vertically integrated Licensee). The “trick” for prospective AFS Licensees is to ensure that you have assured support, proven expertise and the appropriate resources to maintain your AFSL. Thankfully, there are a number competent professional firms that can assist you (just don’t confuse price and value during your tendering process).
Absolutely agree that if you have the resources, financial and otherwise, then having your own AFSL allows genuine freedom in how you advise. That said, unaligned dealer groups can provide an option for those advisers who simply can’t resource their own AFSL due to marital or business breakdown, just starting out, or poor management of own affairs. Like the tradesman who works on everyone else’s house while his is falling down around him.
There are plenty of AFSL’s in the the AIOFP with 5 or less authorised reps. Having an association full of small independent AFSL holders like that means we can access opportiunties the larger organisations provide but also retain our own independence.
As an AFSL holder running a very small practice I can’t for the life of me understand why anyone wouldn’t do likewise. Surely, given the freedom, credibility and ownership advantages of doing so, probably the only reason for a financial adviser NOT to have their own AFSL is that they CAN’T get one…and in that case they’re not really an adviser, but most likely relegated to selling someone else’s position on financial matters, rather than your own.
The added cost and regulatory burden is not to be ignored, but nor are the advantages of being your own counsel and having to answer to no-one but your clients, and being free to act on only what’s in their very best interests.
After 25 years as an adviser with the occasional regret about not being in complete charge of my destiny, 7 years ago I took up my own AFSL and have never regretted it.