Two authorised representatives of Financial Wisdom have left the Commonwealth Bank’s financial advice network and obtained their own licence under a new banner.
Melbourne-based firms Mercury Wealth Management and Guidance Financial Services have come together to apply for an AFSL under the name of Sprout Financial, parting ways with the CBA-owned dealer group.
While the two firms are not merging their businesses, the additional scale and support of partnering made the AFSL application and approval process more manageable, Guidance principal Paul Benson told ifa.
“The ASIC approval came through in August and we then had an off-boarding process to go through with our previous licensee,” Mr Benson said.
“The main learning that might be useful to others is that from when we submitted the application to ASIC, until when we had our AFSL, about six months elapsed. Almost all that time, we were just twiddling our thumbs, waiting for ASIC to review our application … I’m very glad that I have not gone through this process by myself.”
Mr Benson said he recommends others considering the self-licensing route embark on similar partnership agreements with like-minded practices.
“This meant we could share the work load in preparing the application, and act as a sounding board for one another,” he said.
“We have no desire to build up some large dealer group, but once we’ve got things running smoothly we may look for opportunities to partner with one or two other practices with similar mindsets, and that would help to reduce costs further.”
A more professional model
While Mr Benson does not speak poorly of his previous licensee, he said he experienced a growing “discomfort” with being licensed by a major product manufacturer.
“It really felt inconsistent with being a true professional,” he said. “I’m at a point where I think things need to be black and white.
“Either you’re a product manufacturer or you’re an advice provider – you can’t be both. I view the move to holding an AFSL directly as part of a continuum on the path to full professionalism.”
The new AFSL holder questioned whether traditional dealer groups still serve the industry well in an age of rising professional standards.
“Other professions seem to manage without dealer groups,” Mr Benson said.
Mr Benson said it “feels great” to be free of an institutional dealer group, describing his new identity as more akin to a “legitimate professional”.
The move comes as research conducted by Momentum Intelligence and Forte Dealer Solutions found that 28.89 per cent of advisers looking to switch licences are considering self-licensing.
A former institutionally aligned adviser has pleaded guilty to obtaining financial advantage by deception, after he operated an early super access sch...
Ex-Liberal leader John Hewson has urged advisers to adopt a unified front in opposing the increase in red tape in the industry, accusing the governmen...
Adviser platforms are lagging globally when it comes to adding in the features that current and prospective clients want, according to new research. ...