Following ASIC’s cancellation of AAAFI’s licence in January, former authorised representatives (ARs) of the collapsed licensee were “given thirty days to find a new dealership to move to or find [themselves] with [their] licence revoked,” according to one former AR – speaking to ifa on condition of anonymity – with a specified three-day period in which to inform clients of the AFSL cancellation.
According to the administrator’s report to creditors in March, “the directors [of AAAFI] entered into negotiations with alternate dealer groups to house the advisers operating under its licence” in the weeks following the cancellation, with reports that as many as 80 of the 130 AAAFI ARs joined Suncorp-aligned Guardian Advice.
During the vetting process for those advisers looking to join the Guardian licence, it came to light that “a number of loyal AAA advisers did not have the right qualification i.e. upgrade of skills to RG146”, the former AR said in an email, adding that the additional training was undertaken at the advisers’ personal expense.
A second former AAAFI AR – who has since joined Guardian Advice – told ifa that there was an issue regarding differing interpretations of the necessary minimum education requirements from the various dealer groups offering homes to fleeing AAAFI advisers.
“I have an [advanced diploma of financial services] and was required to do the role play to comply with the Suncorp interpretation of RG146,” the Guardian AR said. “However, [a different institutional licensee] said they were happy with my qualifications as they stood,” he added.
A third former AAAFI AR – who did not join Guardian but moved to another mid-tier non-aligned licensee – confirmed that “Guardian wouldn’t accept” some of the advisers who had completed older training modules and that, in particular, it was required that these advisers “redo the case study part” of the RG146 qualification.
“I think it was Guardian’s way of putting off risk advisers,” the adviser speculated. “They were after [funds under management].”
In February, Guardian Advice executive manager Simon Harris told a media briefing that the licensee was looking to recruit as many as 40 per cent of the former AAAFI advisers looking for new licensing arrangements, but stressed that the vetting process had to be thorough.
“Supervision and monitoring really is an important aspect of bringing on new advisers – regardless of whether or not they’ve moved from a failed Australian Financial Services Licence [AFSL],” Mr Harris said.
A Guardian Advice spokesperson was unavailable for comment.
