Having established AAFS Securities in 1999, Mr Munro began to scale down his advice practice after a six-year ASIC investigation took its toll, diverting his focus away from the running of his AFSL. He is now looking for a buyer.
“In June 2002 an external auditor flagged that I didn’t have a particular three-month cash flow document – and [ASIC] investigated me for the next six years and drove me insane,” Mr Munro said. “At the end of all that, all they said was ‘your filing system should be better’.
“During that time, the investigation took time out from my business and I also had to hire an external consultant at my expense to provide all the information to ASIC,” he added.
The investigation process led Mr Munro to conclude there was an ulterior motive in ASIC’s actions – something he warns up-and-coming AFSL holders to take heed of.
“In my opinion, ASIC has convinced politicians that they no longer want to have regulatory control over small dealer groups,” he said.
“There is now a genuine move against small dealer groups – they want them to amalgamate into a larger group or buzz off.”
While he says compliance burdens are only part of the reason for selling out – he jokes that “as you can see from [his] LinkedIn profile, [he doesn’t] have much shelf-life – Mr Munro warns independents of the risks inherent:
“The single biggest issue for anyone running an AFSL is that no responsible entity can ever be sure that their authorised reps are honest and reliable and that’s a major risk that ASIC don’t take into account. They just say ‘well you should have known’.”
At the same time, Mr Munro says it is still possible “to run a successful AFSL in this day and age” if you have the right team.
Despite his decision to sell his AFSL, Mr Munro’s support for independent ownership has not diminished and he would rule out offers from institutional buyers, he told ifa.
“Insto people are the worst people in our industry,” he said.
Best of luck David…. unfortunately every time a communist government is in power, they dont like individual thinking and want us part of a big system.
i cant say i blame you and wish you all the best.
Thank you Aleks and others for your comments.I have begun a linkedin site “asic issues” for people to post their concerns (with solutions) and generate some attention for those issues needing urgent remedies.
Mel…just shows you the intelligence of the average ASiC staffer. I reported a very dodgy investment scheme to ASIC that had been pounding some clients day and night. ASIC writes back to me…not sufficient evidence of scam, taking no action. That’s our Regulator for you. I await for the eventual fallout and then will remind them of that decision.
It is hard to fight the ivory towers. I am an ethical non-aligned, fee for service financial adviser. I do pro-bono and volunteer work, and genuinely help my clients. I recently met someone new at a meeting. I introduced myself, and he asked what I did. When I said I was a financial adviser he said… “oh you are one of those dodgy people, I worked at ASIC for 20 years so I know what you are like”. How do you fight that kind of perception?
Good luck Ian in whatever you choose to do!
I don’t share your view that a conspiracy has been mounted against non-aligned licensees. After more than 25 years in the space I remain convinced that there is still a great future for “independent” AFSLs post FOFA. On the other hand I believe that Ian’s experience with ASIC confirms my view that the very small “boutique” or “self licensed” business will continue to suffer from lack of scale. They have to spend too much of their productive time managing basic admin/compliance tasks. Despite the extraordinary offers of the businesses that offer “dealer services” it is unrealistic to expect to offer services across today’s very wide spectrum as a “cottage” practitioner. The way ahead for serious professional financial planners remains in establishing a business of some scale that has no dependence on product (or platform) providers. I keep getting the itch to do it again – I hope some others have the same itch!
Another sad casualty in the War against bureaucracy. This Country is suffocating under Govt enforcement of ill-conceived laws and inappropriate use and abuse of enforcement powers. Its not just ASIC, its APRA, ATO, and Govt at all levels, all a law unto themselves. Bureaucrats with no life experience in business have no idea how to use the powers they have been given appropriately. After ruining viable businesses and lives they run back to their ivory towers and actually believe they did a god job. Its sad.
Being an “over-governed” country has gone from being a joke to a very sad reality for Australia.
….and you know, when you see a old crippled granny getting swabbed for explosive residue at the airport, its time that we all stand up and say, ENOUGH is ENOUGH!