Ryan Goodfellow, National Growth Manager, Centrepoint Alliance
While it’s still fresh in my mind, I thought that I would share some of my reflections from the recent FPA congress in Hobart.This year, Centrepoint Alliance helped keep the FPA2017 Congress lively by sponsoring a coffee cart. It was a great opportunity to connect with practitioners and engage in discussions.
I couldn’t help myself from asking if they had thought about getting their own license or if they preferred joining a larger dealer group.
In the current environment, more institutionally aligned advisers are asking themselves if their current dealer group is a good fit.
If you think about it, advice firms that have been around for five or more years are typically taking shape to be well corporatised growing firms with at least two AR’s and good support infrastructure.
Their revenue is climbing past the $700k in annual turnover and when they assess what they are paying their dealer group for (particularly if the dealer group hasn’t moved to a flat fee) and the services they are receiving aside from compliance/cpd, technical, research and software solutions, they start to scratch their head and wonder where the value is.
The conflict in these practitioners’ minds is that, whilst they appreciate their dealer group is providing the requisite compliance documents that they need to give advice, when they want to do something that is slightly outside of the dealer groups business rules they are immediately shut down.
As an example, a firm was told by their dealer group that after every fourth RoA, they needed to provide an SoA to their client, without fail. When the practitioner reflected on the fact they had issued eight RoA’s in the last 12 months to just one client then suddenly these business rules seemed unnecessarily labour intensive and of no benefit to anyone, including the client.
I appreciate that business rules are in place for a reason but who are they in place for and who do they benefit? Consider this in the context that dealer group business rules aren’t generally legislated requirements by ASIC.
Suddenly these advisers feel like they are being treated like the lowest common denominator, when in fact they are seasoned advisers who are working in their clients’ best interest.
Obviously, an issue like this in isolation isn’t a reason to fly the nest of the dealer group and apply for an AFSL. But, for many advisers, it does start the research process to find out what is involved with self-licensing and what the environment may look like in a self-licensed world.
That’s where we step in.Centrepoint Alliance has been helping corporatised financial planning firms take charge of their destiny by helping them set up and run their own license.
We help firms through the application process, which can take anywhere from 40 – 50 hours of our professional consultant’s time, to putting together and offering guidance through the ASIC application process. Once the draft license is issued, we help by providing all the compliance documents, including a templated compliance and policy manual that each AFSL needs to have to reflect their business model and license requirements.
In the last ten days, I’ve had four practices that are leaving the bank aligned groups tell me they want their own AFSL and need help with applying for their license.
If you want to assess if you’re ready for self-licensing, use our AFSL application checklist. Answer eight questions to get a score on how ready your firm is.
If you want to know more about what is involved, please feel free to contact me for advice.
You can also watch some highlights from the congress below.