Since we last spoke to Paul Wright from Innovus Advice Solutions, and after more than eight years in the financial advice industry, Paul took the plunge in 2020 to apply for his own AFSL. We spoke to Paul about his experience and what tips he picked up for those considering applying for their own financial services licence.
What led you to get your AFSL?
There were several reasons, but the main thing was trying to remove another layer of complexity in the relationship that we have with our clients. I firmly believe that, as a professional, you should be responsible to your client and to the law – that should be the foundation of the business relationship. So, it was a natural evolution to move to the business to become self-licensed.
How long did the process take?
I started to think seriously about getting our licence in 2017. It did take a while to mull over the decision. When we were ready to go ahead, we gathered information and put together the materials that we would need for the application. I even had a trial run at doing the application myself. We applied in early November 2020, and the licence was granted on 11 March. So from submission to awarding of the licence was about five months.
Once you received your licence notification, what were the activities you need to do to get your business up and running?
A fair amount of work needs to be done once you get notification of the licence being granted. Once you’ve communicated with your clients, there’s a two-week waiting period to get released from your existing licensee. And then you’ve got to get yourself appointed as an authorised representative of the new licence with ASIC and communicate with all the product providers and fund managers. So it probably takes around six to eight weeks before you can say that you are up and running.
What was Centrepoint Alliance’s role in helping you with getting your AFSL?
Centrepoint Alliance played a central role for us, even before we decided to apply for the licence. I spoke to my Business Consultant, Elaine Sze, as I was mulling things over, and when I decided to push the button and go for it, Elaine was there to support me.
We used Nicole Alexander (Head of Licensee Solutions) to help us prepare the final application. Nicole was a tower of strength. She helped us gather all the information, provided feedback on the information, and ensured everything was in the proper format before submission. The result was that it was quite a smooth process. In fact, I don’t think ASIC asked us any questions about what we submitted or asked for any additional requirements.
Was there a significant extra load for you to get all the information required?
Not really. There’s a bunch of stuff that you need to have in place. You’ve got to be able to demonstrate that you’ve got the financial resources to run the license, and you have to have your PI insurance in place.
We were already engaged with Centrepoint about governance. We have access to Centrepoint’s ‘Compliance in a Box’ and the other governance documents, so when we were asked about procedures, I was able to demonstrate that I already had these things in place.
And what has the transition process been like?
So far, we’ve had no problems. One of the first things you need to do when applying is to finalise our fee for no service review, but we didn’t have too many issues there anyway. Then we need to make sure that all of our documentation was available so that when we transitioned out of Centrepoint Compass they could archive the documents, etc. We were going to continue to use Compass, so that wasn’t a problem for us anyway. It was just waiting the 14-day period after we’d sent the letters out. We’d already had conversations about what our communication was going to look like, etc., so we were already prepared for what we had to do.
What tips do you have for people thinking about getting their AFSL?
I’d say the first thing you’ve got to do is decide why you want to do it because it’s not just an economic decision. I think you have to believe in your capability of successfully operating in that way.
You need to look at your AFSL in the context of the entirety of your business and your future plans for the business. One of the things I wanted to achieve was to have two or three advisers to ensure the continuity of the business if anything happened to me.
I’d also recommend talking to your peers about what it’s like to run a licence. The good thing about Centrepoint Alliance is that there were several people in the AFSL Peer Group that you can speak to about their experiences, what you need to be aware of and what the complications are.
Lastly, I think you need to be prepared for the process to take some time. We are embarking on the processes of developing new advice documents for all of the clients and all that sort of stuff, and we understand that we’re going to have some additional work requirements in the short term. I’m looking forward to business returning to normal and operating in the new environment.
