Mixed success among self-licensed firms

Promoted by LaVista Licensee Solutions.

Advisers aren’t leaving their fate in the hands of their licensee or the Royal Commissioner. An increasing number are gaining their own AFSL, backed by a strong dealer services partner, LaVista’s Mike Pope writes.

Mixed success among self-licensed firms

Financial advisers juggle many important relationships. Outside of their family and friends, their most important connections are likely to be their clients and staff, followed closely by their licensee.

The adviser / licensee relationship has historically been snug, particularly in the institutionally-aligned space.

A report released by the Australian Securities and Investments Commission (ASIC) early this year found institutionally-aligned advisers channel more than two-thirds (68%) of client inflows into in-house products.

This ‘closeness’ is an outcome of the vertically-integrated model. However, vertical integration is under significant pressure. This is due partly to heightened media and regulatory scrutiny arising from the Financial Services Royal Commission but mainly from the rising tide of professional advisers who want to see greater separation between product and advice so quality, objective advice can flourish.

In days gone by, likeminded advisers inside a dealer group would band together to push management for greater freedoms, such as broader Approved Product Lists (APLs) and better services. Some formed formal adviser committees.

But increasingly, advisers are not waiting for their dealer group to make the necessary changes. Instead they’re independently exploring their options and being the change they want to see.

Some have gained their own Australian Financial Services Licence (AFSL). Others are seriously considering it.

According to research by Investment Trends, one in five advisers are currently self-licensed; double the proportion in 2012.

Self-licensing is clearly an attractive alternative for many practices but the research also shows that that success is mixed among self-licensed firms.

The 2018 Investment Trends Planner Business Model Report found that while self-licensed firms recorded higher inflows in the past 12 months, only 47 per cent recorded an uptick in profit compared to 54 per cent of other practices.

This suggests that self-licensed firms also struggle with common challenges such as compliance, and client acquisition and retention. On top of that, they have the added burden of managing their AFSL obligations and being a Responsible Manager.

Not surprisingly, 78 per cent of self-licensed firms outsource key functions, such as compliance, technology and Statement of Advice (SoA) management, to a third party dealer services provider.

The key to success in life and in business often boils down to forging and maintain the right relationships and connections.

Partnering with a dealer services provider like LaVista Licensee Solutions is an attractive solution that gives self-licensed firms freedom and control while removing much of the administrative burden. This option recognises that crucial business functions such as compliance, legal, research, and technology - when conducted in-house - can detract from the client-facing, revenue-producing heart of the business. Often they can be delivered more quickly and at scale by a third-party provider, releasing advisers to spend more time infront of clients.

At LaVista Licensee Solutions, we don’t believe that managing your own AFSL should mean less time with your clients.

Our clients can opt for an off-the-shelf package of essential dealer services including advice documents and templates, compliance manuals, and education and training or customise their own package of services from a comprehensive menu. These services include access to a fully-maintained advice portal and website and in-house software support plus access to scale discounts from a range of external service providers.

For more information about LaVista Licensee Solutions visit

Mike Pope is Chief Executive Officer of LaVista Licensee Solutions. He can be contacted at [email protected].


Mixed success among self-licensed firms
Mixed success among self-licensed firms
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