‘Role of licensee has to change’

EXCLUSIVE The role of licensees has to be reviewed, a boutique dealer group has said, while noting the trend to go it alone and become self-licensed is not the answer for a number of advisers.

In an address to the REAL Future of Advice Conference in Vietnam this week, Tony Zulli, Australian Advisory managing director of advice and funds, looked at challenges facing the sector.

He said dealer groups should re-examine their models as the advice landscape is shifting post-royal commission.

“Look, the traditional role of the licensee has to change. We’re in a completely new environment,” Mr Zulli said.

“And basically, we have to review the model. There’ll be new models coming out.

“What that model’s likely to look like, I think it’s going to vary quite widely.”

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Looking at advisers moving from the major institutions and applying for their own licenses, Mr Zulli said the option is not a clear-cut solution.

“I believe there’s probably three or four hundred that I’ve heard that are applying for a license,” he noted.

“But it’s a long ball game. It’s nine to 12 months to get your license. And there are no guarantees you will get your licenses.

“And the bigger question is going to be, you as an adviser, where is your real skill set? Is it actually running a license?

“Or actually building your clients’ wealth and being your clients’ advocate. That’s the question.”

The main challenge, according to Mr Zulli, is finding a balance between compliance, support and commercial reality.

“That’s the fine balance that is always difficult to find. Particularly that you’ve got regulators that are asking a hell of a lot more questions, that’s also being reflected in our dealings with our product providers,” Mr Zulli said.

“The amount of due diligence that we’re actually now receiving back from product providers, as we transition advisers to our licenses has increased, increased exponentially. There’s a lot more paperwork, there’s a lot more proof that you actually have to provide before they’ll even give you an ability to use their products.”

He commented his company is thinking of where its own advice business will move, although changes to its business mode are yet to be confirmed.

The Sydney-based advisory and investment management group has three licenses, each catering to a different service offered by its authorised representatives.

Its main advice licence for advisers is Consilium Advice, while it has a solution for accountants, recommended for SMSF strategies (SMSF Super Advisory) as well as a license for private wealth advisers with wholesale clients, Premium Advisory.

“I’ve got some views about where I believe we should take our advice business. But there are further discussions where we need to be having before we make any significant changes to our business model,” Mr Zulli said.

“Anyway, this is where we are is because we’re a relatively young advice business. We can actually address what we look like based on what’s actually happening in more recent times.”

The conference is hosted by Australian Advisory, industry body United Financial Advisers Association (UFAA) and broker firm Vision Aggregation, with over 350 attendees, including advisers, mortgage brokers and accountants.

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