Radar Results’ latest market update noted that the sale of ‘vanilla’ AFSLs, separate to client books, was an emerging opportunity for advisers looking to exit the industry.
“Financial planners who have been using their own AFSL to run a business can sell the AFSL once the clients have been moved off the licence,” the group said.
“There’s been a significant demand for vanilla style AFSLs, particularly now with many larger licensee groups shedding their advisers.”
Radar Results said with most of the large institutions either exiting the advice space or revoking planners’ authorisations if they were no longer profitable, advisers were looking for easy ways to remain in the industry.
“Many advisers were asked to either find another licensee or retire. If they were unable to find another licensee to join, then an option was to apply for an AFSL, but this can take 12 months,” the group said.
“A solution was to buy an AFSL in the marketplace, which means they are licensed quickly, possibly within a month or so.”
The group said the sale price commanded for a blank AFSL depended on the conditions of the licence, with some valued at up to $1 million.
“The cost to buy these AFSLs can range from $20,000 for a basic vanilla one, up to $100,000 for one that provides options and derivatives trading and may also include a managed discretionary account (MDA) service,” Radar Results said.
“An AFSL that has forex trading capability can command $1 million, but are rare.”
The group also had a number of full practices for sale, particularly in Sydney and regional NSW, including a business in Sydney city with $1 million recurring revenue, and a practice in Newcastle with $580,000 recurring revenue and 200 clients.
Other hotspots of sale activity included southern Queensland, where practices were for sale in Hervey Bay and the Gold Coast, and two Tasmanian-based practices with $340,000 and $500,000 of recurring revenue, respectively.
This should be banned , either go to a competent license like Lifespan or get one through the front door.
Is this large growth in licensees a consequence of advisers trying to escape scrutiny since ASIC is going after the large licensees? In a way it makes the transition to individual licensing easier – not much difference between regulating 8,000 or 15,000 licenses.
It is all a bit strange.
disaster waiting to happen!
What a screwed up industry we belong to. They sign up with some large product flogging institution and are motivated by money, BOLR, and get brainwashed into flogging their products and once they get turfed out they’re looking to become self licensed. They’re probably not the type of advisers we need. That being the ones that put themselves first, and have no consideration as to how those relationships and business decisions impacts on their peers or the wider advice industry. I would say most of them had 20 years to do this, but the lure of cheap dealer fees, subsidized business costs, a cheap conference to Fiji, kept them as foot soldiers of white labeled product flogging insto’s. They’re not making the change because it’s the right thing to do, they’re doing it because they’re forced. Perhaps, however if I’ve got you wrong and you’ve realized you were part of some brainwashing white labbled CULT, I say welcome and good luck.
Well put. The good people in this industry have had, and continue to have, their good work and integrity diminished by the lazy, the incompetent and the greedy. Unfortunately the industry provided the petri dish for these people to survive. But the upside now is that they are being found wanting and hopefully we will see them leave the industry.
Yawnn…. almost all those big bad instos are gone and the few that remain have APL’s broader than most small to mid sized AFSL’s whom have white labelled HUBB and Netwealth for margin.
Most practices that I know that have considered/executed this kind of transition is largely due to moving from an insto to a model where they are more in control of their own pricing, process and reputation.
That’s what I’m talking about. Commissions, Volume Based bonuses and BOLR are gone and it’s like “hey don’t need this in house brain washing, limited APL, compliance regime to keep me flogging their product”. Those advisers should just exit stage right. Just jumping for the best deal. Doctors, Nurses, Medico’s don’t become Doctors to get rich, they have a genuine passion in helping people.
What if I work for an Industry Super product as a Financial Planner – should I also “exit stage right”? I might like my nice little piece of the world at Industry Super – I have a nice office – all paid for, I have all my licencee fees paid for – nice. I get to attend training events – all paid for. I get paid every day I attend the office – all paid for by?
So, who is it you want out of the Industry stage right?
Don’t get me started on those sale chaps, but I blown away by your lower standards. You think just because Industry super funds have conflicts and can get away with so much- that it’s ok for me too? That thinking is how we got FASEA’d in the first place. Why not act Professional, start operating at a higher level and you might just lift some boats on your rising tide…and avoid FASEA Version 2.