The Adviser Ratings statistics for the week to 6 August revealed that the advice sector had seen a net loss of 20 advisers, with a further 34 practitioners switching licensees over the period.
The movement of national risk advice group Experien from Clearview Financial Planning to the TAL-aligned Affinia Financial Advisers made up the bulk of adviser switchers, but a further seven advisers left listed dealer group Count Financial to set up their own licence, while six more left IOOF-aligned Lonsdale and also opted to self-licence.
Privately owned dealer group Lifespan also saw five new advisers join its ranks, while the SMSF Adviser Network added five advisers after additional conditions put on the group’s licence had seen it cull adviser numbers earlier in the year.
Presenting the data in a recent LinkedIn video, Adviser Ratings founder Angus Woods noted that some larger licensees were losing a significant number of advisers as they repriced their offerings due to increased compliance costs.
Count and Lonsdale, which suffered two of the week’s biggest net losses in advisers, had seen numbers decrease dramatically from their peak at the end of 2018, with Count moving from 413 to 260 advisers and Lonsdale from 225 advisers in December 2018 to 186 at present.
Mr Woods said further price increases were expected across the sector, and that advisers should factor this into any potential move to join a new dealer group.
“It’s a pertinent point as advisers look to switch licences or sell their practice or client book to a new licensee, that they should understand the capability set and what’s in place at the licence,” he said.
“We are seeing increases in prices across the board as compliance goes up … I think the average price for a licence is increasing to about $35,000 to $40,000 per adviser.
“So, I guess if you’re paying under that you should be asking why are you only paying $20,000 or $25,000 – are there conflicts in place, what else is going on at the licence, are you getting the compliance support [and] the training support that you need.
“It’s something that’s an ongoing issue and we will continue to monitor pricing across the board.”
A total of 21,536 advisers remained on the financial adviser register as of 6 August, according to the firm’s data.
Don’t forget that old saying. Divide and conquer. The Unions understand it only too well.
Adviser Ratings. Don’t they rate toaster ovens or something? Some classy advisers listed there.
Yeh lol, joke of a business especially that Chris Zimmerframe bloke, carries on like he’s the oracle of Advice.
i refuse tobe a part of the adviser ratings site it is only a data mining source for the sale of your private info to onsellers
I notice Angus Woods has intentionally left this comment well alone unlike the others. You can see right through him.
Anon?!? I’m always open to conversations about our business model, our “data model”, our mandate, our value set. We act in the balanced best interests of the industry and consumer.
Feel free to reach out to me.
angus@adviserratings.com.au.
I try and get back to everybody within a reasonable timeframe. I won’t resort to throwing barbs. I appreciate the industry for what it does and also understand the difficult circumstances it is going through. I always welcome feedback.
Regards
Self licensing is vertical integration, the adviser self licenses because he does not want to be accountable to oversight
Just explain the business rationale / commercial sense of Dealer Groups again – ie how do they make a profit?
Beautifully said.
Sorry, but your comment makes me think you either don’t understand what vertical integration, self-licensing or oversight is.
Vertical Integration – how ticket-clipping product manufacturers own ticket-clipping licensees to coerce advisers to funnel their clients into the manufacturers products, so they can clip that ticket.
Self-licensing – taking responsibility for your own compliance with the tangle of financial services laws we operate under. Given that we already wear all the risk, an eminently sensible option, though one that wouldn’t be needed if this were a mature profession.
Oversight – the big stick over-staffed compliance departments in ticket-clipping licensees use to punish advisers for the licensees shortcomings. Again, if we were a mature profession the oversight would be provided by a single disciplinary body, the government regulator and the courts. Instead we have 2,000-odd different ‘interpretations’ ‘overseeing’ compliance with the law.
Like how each medical clinic interprets the Hippocratic Oath a little differently…
Now, yes, you can have vertically integrated, self-licensed advisers fleeing oversight. This is not a good outcome.
But many people choose self-licensing because they’re trying to get away from vertical integration, and crave adequate, efficient and effective oversight.
Yep. They don’t want to be accountable to oversight that has been massively over complicated in order to compel and defend the sale of inhouse products.
Is that right so you are aware of every one businesses out there who are self licensed interesting !!!!!
Let’s wait and see what ASIC do to control self-licensed businesses over the next couple of years. When the majority of AR’s are captured by larger licensees it is easy for them to capture what these advisers are doing (RG 515, Lookback, opt-in etc). Not so when advisers are no longer corralled.
if you just sell insurance only and stop being a sexy financial planner, dabbling in too many areas you are paying a massive amount in PI to protect your dealer group. You can provide insurance advice by paying a lot less, I can write an essay on this. I know as I have my own AFSL. This has been my message for a long time. The latest effort by IFA to try and have a category for INSURANCE Only is a good move if the message is delivered to the people that make the rules. Remembering that most in the portfolio that governs the banking financial services are ex bankers or connected to this industry.
most advisers have no where to go – if they leave the industry they have no income.
they are doomed.
Even for $20,000 per adviser, it is [b]$430.7M[/b][b][/b] collectively. Basically, every dealer group is providing similar service. Wouldn’t it be cheaper if we can have a uniform compliance approach by one trusted/Government appointed group and replicate for everyone while the adviser run their own license?
Brilliant idea
Great comment.
I’d be fall-down-to-the-floor-stunned if individual registration cost more than 30% of the current price, which you’ve conservatively put at $430.7m.
Sure, doing so would involve us advisers stepping up and taking full responsibility for what we do instead of hiding behind the paper shield of our licensees.
But we’re already wearing all the risk, why not take control?
It makes sense with ASIC’s lookback campaign. Safety in numbers if you are with a small or tiny licensee.
LOL: Adviser ratings have no idea what it actually cost to run an AFSL and if advisers believe they can be self license and fully compliant cheaper than an AFSL offering then they have fools as clients (themselves). You pay more for a dog wash franchise than you do for AFSL fees, it’s about time Adviser ratings learnt the industry instead of being cheap shot takers.
Thanks Bob – I’ve set up several AFSLs in the past, and been an RM 3 times. I know the industry very well having had exposure to it for nigh on 15 years. I think you have missed the point. Not sure if you have seen all our correspondence around this.
Regards,
Angus
Key word is ‘past’ – things are very different now
Not sure about this- all self licensed advisers I have spoken with have confirmed lower costs and much greater efficiencies.
Adviser ratings is a joke.
Another leech on the industry (for their own financial gain) they promote Accountants with limited licenses as high level advisers. Totally agree Adviser ratings does not understand the industry and their website is part of the problem confusing the public and advisers with lower levels of understanding regarding business structures and costs.
Your the fool if you stick with your current licensee instead of getting your own license, I got mine 2 years ago it’s already cheaper than my previous licensee even when we factor in we had to hire a compliance manager. Those who are scared to take risks will always try and drag down the people who do
Licensee fees are an unsustainable tariff on this industry, and it simply shouldn’t exist.
I am yet to hear an argument for licensees that isn’t easily dismantled with logic and the catch-all response – ‘well, every other profession does it?’.
Mmmm…costs go up a bit, so we decide to bail and move to an option that costs significantly more and opens one up to significantly higher risk. Smart!
Sorry Anthony but bloated, conflicted, dealer groups are the major CAUSE of high costs and high risks. They are not the solution. The primary regret of those who have become self licensed is that they didn’t do it sooner.
I have just been granted my own AFSL, after 20 years with Dealer Groups. It is cheaper, free from conflicts, free from corporate psychopaths who have never advised anyone in their life and the “home of the brave”.
I understand but i get a heap of value from the people in my group, and just quietly i don’t mind that they’re considered the provider of the advice if i ever get taken to the cleaners. Better their cheque book than my house.
I see what you’re saying, but you may want to compare that perception with reality under the Code of Ethics.
The Code only applies to individual advisers, remember, NOT licensees or CARs.
Given AFCA’s professed love of the Code, we individual advisers are not as protected by licensees as we once were.
Make sure you tell your clients that. Your like a Doctor “hey take this tablet, whatever happens I’ll have zero accountability”. Hopefully other readers will appreciate with that attitude Anthony why we’re faced with so much regulation.
ASIC are open to massive risk from the privately funded litigation firms for issuing AFSL’s that meet no real capital adequacy measure. Having operated in this space for over a decade I can count on one hand the number of advisers whom truly understood the risk and allocated the appropriate time to manage their RM responsibilities. Just look at all of those unpaid AFCA disputes. The cheap end of town attracts the cowboys along with the purists.
How much is it per year, approximately?