Preparing to put his self-licensed practice up for sale, Brisbane-based adviser David Munro has offered some sage advice to the younger generation of independent AFSL holders.
Having established AAFS Securities in 1999, Mr Munro began to scale down his advice practice after a six-year ASIC investigation took its toll, diverting his focus away from the running of his AFSL. He is now looking for a buyer.
“In June 2002 an external auditor flagged that I didn’t have a particular three-month cash flow document – and [ASIC] investigated me for the next six years and drove me insane,” Mr Munro said. “At the end of all that, all they said was ‘your filing system should be better’.
“During that time, the investigation took time out from my business and I also had to hire an external consultant at my expense to provide all the information to ASIC,” he added.
The investigation process led Mr Munro to conclude there was an ulterior motive in ASIC’s actions – something he warns up-and-coming AFSL holders to take heed of.
“In my opinion, ASIC has convinced politicians that they no longer want to have regulatory control over small dealer groups,” he said.
“There is now a genuine move against small dealer groups – they want them to amalgamate into a larger group or buzz off.”
While he says compliance burdens are only part of the reason for selling out – he jokes that “as you can see from [his] LinkedIn profile, [he doesn’t] have much shelf-life – Mr Munro warns independents of the risks inherent:
“The single biggest issue for anyone running an AFSL is that no responsible entity can ever be sure that their authorised reps are honest and reliable and that’s a major risk that ASIC don’t take into account. They just say ‘well you should have known’.”
At the same time, Mr Munro says it is still possible “to run a successful AFSL in this day and age” if you have the right team.
Despite his decision to sell his AFSL, Mr Munro’s support for independent ownership has not diminished and he would rule out offers from institutional buyers, he told ifa.
“Insto people are the worst people in our industry,” he said.
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