As our industry enters a new period of change and innovation, it’s clear that many practice owners are looking at their futures. Among the many business needs they’re considering, including technology, pricing models, sustainability of their business, as well as compliance frameworks, they’re also considering their licensing needs – more so with the notion of self-licensing.
The lens with which they’re assessing their licensing requirements through, isn’t just focused on now. It’s 5 and 10 years from now, and with some extra thinking around how their current licensing arrangement might change in the future – whether by their choice or not.
So in my new role, I thought it was important to put some of my own thoughts down in writing. And maybe attach an opinion or two, after many years of working with practice owners and as a Licensee head.
My main thoughts for this article, are around dispelling the myths of applying for and managing your own AFSL. For a long time, there has been an air of mystery around having your own licence and that it’s only for a select few. I don’t think it is. But I also don’t think it’s for everyone, especially if you’re considering it for the wrong reasons.
We know that under a larger licensee, you’re in a ‘single operating model.’ You and potentially 300 other advisers are doing exactly the same thing. Which means that the compliance regime has to accommodate that full spectrum of adviser experience and skillset, and usually manage for the highest risk advisers.
It’s a great solution if the businesses are like a McDonalds and everyone delivers exactly the same service. But we know that financial planning doesn’t always work that way. Most practice owners want to deliver a different experience and even service a different market than those that are happy with a ‘McDonalds’ experience.
It’s important to highlight that many practice owners don’t necessarily want their own AFSL. What they want is to take back control, create more transparency and realise their full potential as a business owner. With that requires stepping out and taking on some risk.
At Connexus Solutions we have a consistent view that if you’re focused on growing your business, there’s some sort of management structure in place, you’ve got a strict compliance regime and framework and you have zero client complaints, breaches and remediation issues, you’re well on the way to being a good AFSL candidate.
So, let’s get down to some of the key myths we know exist around the topic of AFSL ownership.
Myth One: Having your own AFSL is time consuming
It’s not as onerous as people make it out to be. If you’re partnering with the right services and AFSL support providers, you aren’t doing all of the heavy lifting. Plus, these providers help you to manage the annual requirements and keep you accountable. And they are there to keep you safe! There’s evidence to say that you can actually improve your productivity – have a chat to us about this one.
Myth Two: Compliance is too onerous
Our view is that you’re probably already accommodating about 70-80% of compliance and regulatory requirements anyway. With the right frameworks and support, it’s simple to include the extra requirements of holding an AFSL and managing AR’s. And with the best of breed compliance support providers, a lot of this can be digitised and automated.
Myth Three: It costs more to run your own AFSL
When you choose to get your own AFSL, you get to control your own destiny and pull back control of your business. With that comes transparency of where you spend your money. When you run your own business, you know exactly what you’re paying for and can choose when you need to invest in extra services. It becomes less about costs and more about investing in the areas of growth that you need to improve your business.
We think there’s one major factor that gets overlooked – you don’t need to give up community and sense of belonging.
You’re not alone if you choose to get your own AFSL and work with a provider of licensee services. Not only do you get the support of service providers to help you run your business efficiently and effectively, you get a community of like-minded peers and professionals doing the same thing. Your fellow practice owners are growing businesses just like you, so you can all learn and grow from your knowledge and continue having the networking experiences that you’re used to. Even better when you have a community of high performers with the same cultural alignment and performance expectations.
That’s what we’ve built at Connexus Solutions. A place for you to take back control and get the services you need, so you can increase your value to clients, innovate and grow. We’ve already got a community of peers waiting to meet you.
To find out how Connexus Solutions can help with your licensing requirements, visit our website.
