One Advice practice’s story on managing their own AFSL

As we continue to look at self-licensed advice practices, Murray interviews Ron McCumstie of MBA Wealth Solutions. He posed some questions to Ron around managing licensee responsibilities and how the business really benefits from having their own AFSL.

MS: Thanks for joining me Ron. How long have you had your own AFSL now?

RM: We have had our license for over 30 years and have experienced several significant changes over that time. For a while it was just Dustin, myself and some good support staff managing the business (AFSL). Andrew joined a few years ago and Greg not long after that. 

MS: Over that period, what do you feel have been the main benefits of having your own license?

RM: I think probably the main thing is it just gives us a little bit of freedom to decide which way we really want to go with the business. We get a little bit of scope to move in a direction that we want to, rather than being dragged in a direction that we may or may not agree with. We are guided but some great legal help which is key to keeping us on track.

We appreciate the interaction and for years enjoyed being part of a small knit community. Attending large PD days probably wasn’t our thing. We started thinking, is this the way we really want to go with the business? We've got our own license and yet we come to these PD days. The larger institutions were become very rigid in their approach and the help we used to received began to suffer as I guess they were more concerned about the risks within their own licenses rather than helping us. I suppose in the last two or three years, we thought more about having a license and rather than following along, maybe we needed to decide a bit more, take a bit more control of where we want to be and go. Even today we're changing, looking at and reviewing parts of the business to hopefully make things better.

Having a license allows us to have our own investment philosophy too. It gives us freedom and choice when we put it together and we can have control over what we use, how we use it and who we use it for. Whereas if we didn’t have our own license then an investment philosophy just gets handed to you. This is where our license lets us personalise and develop our own way of thinking around investments and helping clients meet their goals.

MS: If someone else is considering getting their own AFSL, what are the challenges you would highlight with them?

RM: I think we have taken some time to get everybody in the license to a point where we're all on the same page. We know everyone in the business gives good advice, but if people come through our door at the moment, they may get four approaches to how the advice is delivered. Ultimately, we're trying to get to a point where we've got one business wide approach to a client.

From a compliance perspective or advice perspective, we all knit together.

We're lucky we've got the support staff we've got. They're really great and all work well together. They've also got a compliance mindset. If something needs picking up or checking, or if someone's doing the wrong thing, then people call it out. You know, “hey, you forgot to do this”. It's not the police so to speak, but no one’s afraid of speaking up.

MS: What about the challenges of actually running the license? Do you spread the workload?

RM: That’s one thing we're talking about at the moment. In the past, it was two advisers. Between the two of us, I knew what I was going to do and Dustin knew what he was doing. And we sort of worked it out as we went along. But there's now four advisers. So we're going through a process now to be more serious about who's responsible for whatever function that may be - whether it’s marketing or compliance, or advice delivery. It's still going to be a collaborative approach, but we realise that someone needs to be the champion for a particular area so that we’re in control of that and make sure it's done.

After running a license for 30 years you can become complacent and there is a threat you can become too relaxed. We recently engaged a law firm to do a full audit on our business as a bit of a reset to make sure we had the right foundation for the future. The results were pretty pleasing and I guess showed that if you have the right compliance culture and want to do the right thing meeting your obligations is not that difficult. 

M: What are the things that you considered when you were looking to partner up with someone? And why Connexus?

I think we do good advice. I think we're pretty good at that. But some other things we’re not so good at and we need our hand held on those areas. That's where we looked to outsource and Connexus is helping us do that.

One of the most valuable things is when you can get a group of advisers together that you know, and we've known some of the guys that are in the Connexus group for quite a while, and we share with them and they share with us. We're sharing it for a reason, so we can all better our businesses. And I think that's the most value we get, is the sharing with similar or like-minded advisers that are grappling with or challenged with similar problems or issues. 

MS: If we were to compare it to a large licensee, what are the differences?

RM: I think as things get bigger, things get lost. There'd be some businesses in Connexus that we haven't had a lot of involvement with, but I think because it's a smaller group and a bit more intimate, they'd be willing to share straight off the bat. As opposed to a larger group, where you bump into a business owner at an event and I don't think they're going to be as open to sharing with you. And I think that's one of the things we'll hopefully get out of it.

MS: Since joining Connexus, is there anything that has stood out and made you glad you joined?

I think we've made the right decision. It's still in its early stages and the current environment has meant it hasn’t fully taken off with having group events and the like, but we're still comfortable with where it's at.

If we can share some services, share some ideas and get ideas back from other people, as well as mix with a group that are like-minded, then we're more than happy to do that.

We're in a time in the industry where you don't have to all be the same. It's okay to say I want to join a licensee and I’m happy to just pay someone else to do everything. Or I want to have my own license and build my own business, to be a little entrepreneurial. There are pros and cons for both.

Everyone's work really matters, no matter who you’re licensed through. But we want to be able to do what we want to do. That's what having a license allows us to do.

MS: Thanks for your time Ron.

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