Yesterday, ifa reported that almost 30 advisers operating under AMP’s SMSF Advice licensee have jumped ship to non-aligned dealers, with the lion’s share going to Akambo Private Wealth.
ifa understands the movement follows AMP’s decision to tighten its classification of authorised representatives and re-focus on fully-fledged, client-facing financial advisers rather than accountants operating under limited licences.
A source close to the matter, speaking to ifa on condition of anonymity, said the about-turn regarding accountants looking for a limited licence following the removal of the AFSL exemption on 1 July 2016, follows a number of disputes between the company and its SMSF-specialist recruits.
“It is not surprising that many of these accountants that joined [AMP’s] limited licence are leaving,” the source said.
“[AMP] was trying to run it like one of [its] other financial planning dealer groups but it became very clear that they didn’t want to do anything differently from what they had always done.”
While AMP offers a number of licensing options regarding SMSF advice, these incoming accountants were being pressured to upgrade to full authorised representative status in order to be more productive pushers of in-house product, the source revealed.
“If the accountants wanted to continue to provide advice just around the [SMSF] structure itself, then there was less ability for these advisers to place clients into AMP investments and managed fund products,” the source explained.
In addition, AMP’s in-house compliance requirements were seen to be more stringent than those of other licensees competing for business among accountants seeking a limited licence.
“One of these advisers spent 12 hours writing a statement of advice (SOA) to AMP’s standards,” the source said.
Akambo director Chris Willaton told ifa his company’s strong existing relationships with the accounting profession are a primary factor in the dealer group’s growth among this demographic of adviser.
12 hours for a highly technical SMSF SoA, for a beginner probably with no understanding of the software isn’t out of the realm of possibility, especially if they did all the initial data entry.
However this plus the overall article illustrates three things;
that the compliance aspect of our profession is obscene in comparison to what every other profession has to endure;
accountants getting ‘licensed’ is one thing, but having them follow the rules and procedures like a proper qualified experienced FP is altogether different, and a real risk to AFSL’s chasing numbers; and
potentially, if they do follow the correct procedures, especially for smaller firms that it simply won’t be commercial for them to remain licensed as opposed to having a good working relationship with a specialist FP who isn’t necessarily aligned with an institution.
As we all know, it is not simply a matter of whether the advice is correct, it is also how it is documented and delivered to clients from a compliance aspect (somewhat sadly).
All so true. I bet you that the AMP sales staff employed to get accountants on board and selling them the dream were pretty good at their jobs. Sadly those same salespeople have now been replaced by AMP auditors. Sold the dream, employ an 18 year old financial planner, pay them $45K and give them instructions to set up a SMSF and investments and the additional revenue stream will roll in. I reckon there will be plenty of financial planning books for sale going cheaply in about 3 years time offloaded by accountants who will realize the dream is a compliance nightmare. Far easier to find a trusted partner/adviser now, get them to recommend the set up and strategy development together, and stick to just doing the SMSF tax return charging $2K to $3K a year.
Joe, you are on point yet again. It doesn’t matter what the outcome is – that is indeterminable- it’s the process you followed that we are judged on. Who cares what the outcome is for the client, that is not important. it’s the process that’s important (the public or the client might view it differently however). that was the intended outcome of the law, follow the letter of the law, not the spirit. Otherwise, you will be made examples of. Shows how little the regulator actually understands the advice industry, none, nil zero. but that is not surprising given the feedback they take on board are from product makers not advisers. pathetic and sad state of affairs to say the least. we have no representation so it is hardly surprising our views are not represented
This is no shock. Licencing Accountant is a mugs game. They have been dragged kicking and screaming into the AFSL world and represent a major risk and complicance burden for the AFSL. Great that the ‘non-aligned’ licencees are picking up the slack but they will end up in the same precarious situation
You wouldn’t want to touch them. They think they are professionals: owing to the fact that they all have to endure 3 years of practical experience mentored by a professional accountant, a post graduate qualification, 500 years of operating history of demonstrating that they can successfully adapt and change with the times. And last but not least, having to adhere to a code of conduct. Yes, accountants are terrible risks. somehow they always seem to pip car salesman and politicians at the post and remain the trusted adviser year after year on countless surveys.
Maybe the accountant needs some basic business advice on the division of labour and have a para planner do the grunt work of he SOA under the advisers instructions, like any normal planning business does.
Welcome to the real world of massive AFSL compliance Accountants 🙂
No surprises AMP is getting out of this market. I love the corporate jargon “re-focus on fully-fledged, client-facing financial advisers” which actually means “if you’re not fully under our vertical production distribution model you don’t fit”.
Its just a pity they didn’t have more respect for the accountants they recruited rather than effectively stuff them around for a couple of years whilst they progressively tightened the screws on getting them into the VI model.
AMP should just be honest in their value proposition. If you’re new to the industry or need sone financial help to build you’re new business come to us. But if your experienced or have a successful profitable business you probably won’t fit in. AMP is excellent in a defined narrow space but outside that? Well………
Read the article before you start with useless comments
Hard for some individuals to adjust, having to go from a 30 minute meeting and writing the strategy of rolling over the industry super fund to the SMSF to buy that commercial property with share advice thrown in for free… all on the back of a postage stamp, now to the whole process of providing the relevant consumer protection documents.
12 hours!? Did they write it from scratch? My template with Dover using Midwinter usually takes an hour from start to finish for most SOAs (super and insurance recommendations)
[quote=Steve]12 hours to write an SOA just means that accountant doesn’t know how to write one.[/quote]
Or why an SoA was required!
Sounds like Accontants still wanting to do what they have always done.
12 hours to write an SOA just means that accountant doesn’t know how to write one.
Agree for basic advice which is what they were likely providing.
If you provide very detailed, complex advice 12 hours its uncommon. There isn’t always a ready-made template for everything.
Sorry, this should say “isn’t uncommon”
Steve what a silly simplistic comment to make. Stop embarrassing yourself buddy. Obviously he/she was learning, put yourself in the shoes of someone entering a brand new profession, new software to learn, all the information to enter and potentially multifaceted strategies to pull together in the modelling, not to mention vetting procedures etc.
Surely it doesn’t take too much of a wider perspective or a broader mind to comprehend the time consumed in all these aspects for a newbie.
If anything, it should be a good warning/illustration that perhaps they should stick to what they know and can charge adequate fees for, and leave this arena for us professionals.
agreed. or maybe, the accountant is a highly qualified professional, technically competent, and understands the useless regulation supposedly created by bureaucrats to safeguard client interests is process driven and is trying to write a thesis (like they did when they completed their masters degree) to match.