Readers will remember our last episode where Nick Bruining had decided to take the leap of faith required to obtain a dealer’s licence. We left our intrepid hero dangling from the precipice with a suitcase full of ASIC documents in hand.
Well, here we are three weeks to D-Day and things are not looking too good for the change over.
The volume of material required for a securities dealer’s application seems to grow every time I re-read the information section. I’m sure the pages are breeding, stuck together like that in my brief-case.
I reckon ASIC must have their mail delivered by a Caterpillar D-9 Bulldozer everyday. Perhaps they’re attached to the Australian Institute of Sport weightlifting team and training every day involves running up and down the stairs with a Dealer’s License Application.
Not wanting to cash in my security deposit to pay for the postage to get it there, I decided the best way to solve the problem (and ask a few probing questions), was to make another call to our friends in ASIC.
Having established that they’re not a bad bunch of people, I rang and was transferred to the call centre. Now the call centre is a place where happy people answer the phone and pass your message on to apparently unhappy people who don’t answer the phone. This is particularly true when the calls are from lemmings with probing questions.
I was soon called back by a bloke who announced himself with a voice like Effram Zimbelist Junior (You oldies might remember him as Special Agent
Something or Other from the TV Show The FBI).
“What was your enquiry?” – Effram.
“Daaaa Daaaaa, Ummmm – How’s the weather over there?” – Me (trying to lighten things up and remember what the hell the questions were).
“Acceptable.” – Effram
“Ahhh Good, Um …” – Pregnant Pause.
Now at this stage, I reckon the special agent has grabbed the big black Artline
Felt Pen and on the white board they have over there at ASIC he’s written:
Nick Bruining – LOOPY: Do Not grant license under any condition.
So to recover any chance I had of getting a license, I thought it time to hit him with my probing questions. Now, in amongst the various appendices and numbered staples, the application requires you to substantiate your knowledge of
“The Law” in certain areas, in your own terms.
I personally think this is a great idea as it ensures that you actually know the stuff you’re supposed to. I must confess to spending an hour or four, pouring over Policy Statements, wearing out Part 7 of my copy of The Law and working through section 9 for key definitions – just to get things underway.
The problem is, where do you stop? It’s quite easy to reel off a couple of thousand words on any topic to do with Corporations Law.
So probing question number 1 – How much material do you want ?
The answer was something like: “as much as you think you need to send in to explain it in your own words”.
“OK great, yep, got that, thanks.”
Eventually we worked out that a couple of paragraphs was going to be OK. I also discovered that this is the season for lemmings. It seems that the turn around time has blown out and that they’re now quoting 6 to 8 weeks for applications.
This is from the seven days I had been lead to believe was necessary.
At this stage, I thought a suggestion of slipping in a $50 note was not going to help my cause and resigned myself to waiting a little longer.
The next potential hurdle was a meeting with my dealer, Hillross. You might recall the first meeting where I canvassed the idea of taking out my own license.
This time it was with the Head Honcho himself and I had no idea how it would go.
All sorts of horrible visions flashed through my head, particularly having to get 10 year’s worth of clients to sign a letter transferring rights (and trail!) across to my dealership.
If you’re a regular reader of Money Management or other financial planning magazines, you occasionally come across the debate of “Who owns the client?”.
Whilst none would argue that a client controls their own destiny, many would argue that as the proper authority is representing the dealer, the client is a client of the dealer’s and not the proper authority holder.
That perspective is fine when you’re a dealer, but let me tell you, it sucks when you’re the proper authority holder and have been the only person your client has ever seen.
This perception of client “ownership” is the basis of many disputes and sleepless nights.
So, ready for the worst, we discussed why I was going. He told me of the plans for the future and we generally agreed to disagree on a few points.
To put it bluntly, I was nervous. All sorts of silly things come out when you’re nervous. I think I told him we got a new dog on the weekend whose name was
“Furgy”.
He gave me the kind of smile that Special Agent Something or Other would have had when he wrote my name and the message on the white board.
At the end of our discussion, I hit him with the big one. “Would you agree to transfer my clients at dealer level to my dealership, presuming I am successful?”
For those that don’t know, many fund managers will now accept a letter of assignment as they can individually link an adviser to a client. In other words, one letter from my dealer to the fund manager, will assign all of my clients across from Hillross to my dealership.
So, in what can only be a sign of a very mature and professional dealership, he agreed to do it. Now for anyone thinking of starting in this profession, make sure you end up with a dealer with that kind of attitude.
While I would never recommend that anyone just leaps in directly to a dealers license, selecting a dealer to represent could probably be the most important decision you make in your professional life. Selecting a dealer with good resources, technical backup and a commitment to professional standards is a must. It helps when the dealer has a realistic view of where clients come from.
In some cases, you might service or work with an existing client base, or derive your clients from a sophisticated marketing program. Ownership can be difficult to define. However, a dealer who recognises the clients you introduce from your own efforts and provides free passage of those clients, should be acknowledged as being pretty decent. And no, they didn’t know this series of articles was being done.
My final comment relates to those considering life as a lemming. Life as a lemming doesn’t suit everyone. It suits me because of the direction I wish to take my financial planning practice. If you’re generally happy with the way things are, stay where you are.
In the next issue I’ll report how much I’m now loved by the fund managers. Do they think I’m bringing the entire Hillross Client base across with me?
