In an exclusive interview with ifa, Dave Akers, the director of channel strategy and services across AMP’s various advice businesses, said advisers should think carefully before opting for the self-licensed route.
“From my personal perspective, with self-licensing, if I was a practice principal I would proceed with caution in terms of going alone in an environment where regulatory scrutiny and compliance is never more present,” Mr Akers said.
“Partnering with a large licensee like ours is a good partner to have when we tackle the shifts in regulation. When I talk to advisers in our network they appreciate the effort it takes to be a licensee and the value we provide. They realise that becoming self-licensed would be a very costly exercise.”
Speaking on a panel at last week’s IFA-CON event in Sydney, Beacon Group managing director Peter Daly gave similar advice, warning practice principals that self-licensing is not a shortcut to less compliance.
“One thing we are very quick to tell them is that if you think that by joining a smaller dealer group or setting up a boutique that you’re going to escape that level of compliance, then you’re absolutely wrong,” said Mr Daly, who is also chair of the AIOFP.
However, Boutique Financial Planners president Dacian Moses told IFA-CON delegates that the move to self-licensing was a natural progression for the industry.
“We’re anecdotally seeing a move of advisers away from both the large and the mid-tier groups to smaller boutique practices,” Mr Moses said. “I see it as part of the new profession of financial planning that is emerging.”
The comments come as two Melbourne firms formerly aligned to CBA’s Financial Wisdom licensee have formed a breakaway boutique due to a “growing discomfort” with the institutional model.
Recent Momentum Intelligence and Forte Dealer Solutions research found that 28.89 per cent of advisers looking to switch licensees are considering self-licensing.
Once again, the UK experience may help. Some advisers did choose to find a home in ‘networks’ probably most like your non-aligned dealer groups. However, there are risks, including reputational and business continuity when aligning yourself with another business which may end up with a poor adviser, or worse, cease trading leaving you up the proverbial creek … and you are still forced to trust someone else to get all the compliance and other obligations right. An increasing number of advisers are now choosing to ‘self-licence’ and then buy in additional support, perhaps compliance consultants, file checkers, document template providers, research etc to fill in the gaps they have identified in their own skills … I cannot speak for ASIC but if in the UK you can demonstrate overall competence and awareness of the rules, and you address shortcomings promptly, our regulator is more helpful and supportive, even tolerant, than the big firms would have you believe …
I think a lot of us would like to go down this road Gillian, but have been scared off by stories about how complicated and expensive it is. I don’t know if it’s a factor in the UK, but seemingly one of the big issues here is also the cost and difficulty of getting PI insurance. Sadly Australia is also burdened with a regulator that is far from helpful & supportive, not least due to personal and political prejudices in their leadership ranks.
Nonetheless it would be great if there was a good source of factual info about exactly what’s involved in becoming self licensed. The IFA conference at which you recently presented Gillian had a session supposedly focused on this, but the speaker was actually from a dealer group and the agenda got hijacked. Does anybody know of a good source of info on this topic?
I’m pretty sure there’s a link to this article under the definition of “irony” in the dictionary.
We obtained our AFSL a few months ago and haven’t looked back. We did it because we are fastidious with our compliance and advice process and got sick of having to adhere to irrelevant policy which was chewing up back office time. I find those that run their own AFSL do it for similar reasons and detest insto-product sells and being lumped in with the worst adviser in the network. Sit down AMP.
Don’t understand what AMP is saying , they have 60% of advisers that are non degree planners , Out they go anyway !!! have they told Shareholders , how many are “out the door post” 2024 ??
It would be great if IFA wrote more stories about advisers who became self licensed. Becoming self licensed evolves a driving passion to lift professionalism in the industry as opposed to dodging compliance obligations as it is claimed in this article. Being self licensed is more about operating at higher standards and a commitment to act in the best interest of clients at all times. With the fastest growing industry being compliance there are plenty of support services around. I have more compliance support now than I previously received. My costs are down which enable me to employ more staff to serve clients. Obtaining my own AFSL was strict and tough and I am thankful ASIC takes such as firm approach, but it was worth it. I would highly recommend it for any adviser who wants to put the needs of clients first.
The lengths institutional licencees go to hold on to advisers that could (in their eyes) could write more product is astounding, or is it?
Is this type of institutional thinking really in the best interest of our profession or more importantly in the best interest of our clients?
I have participated in the dealer group space for the last twenty years, in various roles. My reaction is always the same when an adviser wishes to get their own license. I shake hands with them and congratulate them on advancing their career.
ASIC is going down the road of Regulatory Technology. Essentially they are reducing the barrier to entry for the boutiques, by allowing them to use technology to meet their compliance obligations.
The problem in the institutional space is legacy thinking and systems. Welcome to 2017!
“don’t leave me!!, I will have less people to extort money from if you leave me!!”
It would be great if IFA could give some airtime to those organisations that help planners become self licensed. We’ve heard plenty of views on the subject from dealer groups who want to sign up more planners to their licence. What about those from the other side of the fence?
As for Dave Akers’ view on self-licensing, in the misquoted words of Mandy Rice-Davies, “Well he would say that, wouldn’t he?”
Agree…and if AMP are going to say this stuff, maybe wheel out someone with FP qualifications and experience as a Planner to say it maybe?
My thoughts precisely!
Self licensing is not hard at all and neither is compliance. Not surprised to see these type of comments as when it comes to best interests ,you can usually rely on large dealer groups to push their own barrow.
A wise person once said if you see a provocative statement, first identify the speaker and then ask what’s in it for him. Insurers are like ASIC-the prefer to deal with big licencees. My tied office tried to scare me about going multi in the 80s. In the 90s I was told being a life broker was hard. Insurers tried to talk me out of getting a risk AFSL. All BS ! All self-interest. The big end of town just wants control!
Best thing I ever did was get my own AFSL.
Yes the compliance and regulatory scrutiny is still there but I believe my risk reduced as now I don’t have the risk of reputation damage due to someone or something else going wrong in a AFSL for hire scenario.
My costs are similar but now I don’t have a license telling me that this week I should put all my clients in x and next week in Y just so they can shore up the sponsors for the conference.
Couldn’t agree more.
I first helped arrange/apply for my employers AFSL back in the early 1990’s – then years later again for my own business.
Compliance IS an issue – but not as big an issue as wasting your time dealing with the BDM from a large Insto/Dealer!
Wow amazing story, AMP tells advisers to not self license. Groundbreaking news.