While there is increasing interest amongst financial planners for establishing their own Australian financial services licence (AFSL), many have concerns about the lack of support and information throughout the process, according to consulting firm GreenZone Australia.
Co-founder of GreenZone Australia, Geoff Rimmer said he had seen an uptake of interest amongst planners who felt that an AFSL would render them more independent, as well as increase the opportunity for them to provide conflict-free advice. He said many, however, still held concerns about the levels of support available to them.
“There is no doubt that moving AFSLs or establishing one from scratch is a big decision,” he said.
“But they (planners) are worried about the cost of setting up and maintaining an AFSL, and they aren’t really sure about the steps that need to be taken to get there.”
Rimmer affirmed concern that the establishment of an AFSL from scratch was a large investment, but said the 200 of 400 applications for licenses taken back by the Australian Securities and Investments Commission (ASIC) last year were testament to the need for specialised support.
“That’s a lot of very expensive mistakes,” he said of the licensing ‘fail rate’.
“Holding an AFSL is an adviser’s key to future professionalism enabling the provision of truly independent advice.
“The industry must continue to move towards independence if it is to become a true profession and to ensure planners act in the best interests of their clients.”