Everyone knows what a lemming is. They’re small, cute, rodent-like creatures who live far up north in very cold climates. Every few years or so, they run like mad at a cliff and leap to their deaths.
The thing is, one goes and the whole lot follow.
Why, you ask, is this important ?
I have a thing about lemmings. Over the past few months, I’ve become a lemming. I developed the urge to leap to my death. In spite of the dire warnings of my dealer about how difficult it will be, the look of wonder from my fellow PAs at the PD days when I tell them what I’m doing, I’m still going. Truly I am, I’m going to become a DEALER.
After 10 years with an AMP agency, seven of them spent with a Hillross, I’m divorcing good old Amicus Certa Et Reincerta. With a Latin slogan like that, can you blame me?
Why you might ask ? Certainly, that was the question asked by the Business Development Manager when I met with her, primarily to see if they would alter my dealer cut.
Because dear reader, apart from being a Lemming I am somewhat of a mercenary bastard. I figure that I should try and get as much as I can for my family, rather than firming up Reinserta’s share price (notice how its dived since I made my intentions known ?).
The meeting went a little like the scene in Monty Python’s Life Of Brian when they’re discussing what the Romans have done.
“Well, you see, you took nearly $30,000 in dealer cut last year and I don’t really see what I got for my money”.
“There’s the research”!“Yeah, well I can get that from other places for half the price and you guys charge for research on top of my dealer cut.”
“There’s the special bulk software discount price”“Well actually, the people that provide the research also provide the software which is included in the price”.
“What about the technical support”“Yeah well actually, your guys sometimes contact me for advice”
“What about the compliance issues and the cost – now that’s going to be expensive” !“Yes, I thought about that, but considering you charge me another $500 a year for compliance on top of the research on top of the software on top of the dealer cut, I reckon I could get Alan Cameron himself over here to do the audits and still save money”.
The meeting was very nice. I got a chocolate milkshake with one of the those little crunchy biscuits, but I didn’t get any more money for the kids.
So having crystalised in my mind that “I’m gonna do it”, I start finding out what’s required.
First stop, the Australian Securities and Investment Commission.
It felt a little like ringing Hannibal the Cannibal. Do they trace calls? Do I change my accent to South African and deny all knowledge when they call back ?
Surprisingly, the guy on the other end was really pleasant, helpful and full of information. After a 20 minute discussion it finished with, “Yeah sure, no worries-I’ll send you out a kit”-I gave him my wife’s mother’s best friend’s P/O Box number in another state, just in case.
Two days later the “kit” arrived
After reading though it, I soon discovered why not everyone is a Licensed Dealer; The paperwork is incredible.
When I was little and got a kit for my birthday, it sometimes came with a sticker on the box that said “Paints Required” or “Cement not included”.
What you basically get in an ASIC “kit” is the full construction plans for the USS Enterprise with a note on the outside saying, “Steel not included”.
It contains an information section and the relevant application forms, some 20-30 pages of material where every word means something important. One of the many things I discovered was that ASIC are big on appendices and numbers. Everything is numbered, even the staples.
Having been an A grade student in Corporations and Securities Law, I half expected the application to be somewhat involved. What I didn’t expect was a need to submit my application in volumes spread across three CD Roms. Apart from needing to substantiate a good working knowledge of the relevant sections of Corporations Law, ASIC require comprehensive financial reports and proof that you can put your money where your mouth is.
Now, don’t get me wrong. Anyone that knows me also knows that I’m a firm advocate of raising this industry’s standard as high as possible but the Securities Dealers License Application is one mean mother and not to be taken lightly.
After a 5 minute read I decide that my transition date of March 1st 1999 will now be April 1st 1999, if I’m lucky. Preparing the application is time consuming and if you don’t already have them, copies of the current Corporations Law, Practice Statements, The Good Advice document and a whole raft of research materials such as some basic Business Law texts are mandatory.
I also took the advice of the Kit and set about getting my references and Federal Police Checks under way, straight away.
The Police Clearance application’s pretty interesting, after going through the usual stuff about who you are and where your were born, the questions started getting heavier and heavier. I half expected the question most likely to make all planners shake in their boots.
In the past ten years have you knowingly or otherwise, ever:
Been convicted of a drug trafficking offence ?
Been convicted of a theft or fraud in any state ?
Been involved in a homicide or kidnapping ?
Sold a whole of life insurance policy ?
Notwithstanding the amount of information ASIC require, the application serves as a great test to ensure that you the applicant, knows what you are doing.
With 4weeks to go to the planned changeover, panic’s starting to build as there is still a whole lot of work to be done. None the least of which is getting the application into ASIC.
One thing highlighted in the information section and confirmed by a few other Lemmings I’ve spoken to, make sure you get the thing right before you send it in. Some Lemmings have reported that “Clean Skin” applications can take as few as 7 – 10 days to process, unconfirmed but certainly a turn around time to aim for. On that basis, I’ll delay putting it in until I’m sure it’s perfect.
In my next installment of “Leap of Faith” I’ll report on the collation of my ASIC required materials, how I went with a meeting with my Dealer’s General Manager. The meeting is about the transfer of clients from them to my dealership – that’ll be a fun meeting – and some of the other tricks I’ve picked up from other Lemmings I know.
The great thing about this series of articles is that they will be in real time, I have no idea how the saga will end.
– Welcome to Money Management’s own Trueman Show !
By the way, I discovered that Lemmings do not leap to their deaths, the story is a myth. Lemmings periodically migrate to other locations when the local food supply runs low. Some times they try to swim rivers which are too wide for them, but they never jump and they don’t blindly follow one after the other.
It just goes to show you, don’t always believe what people tell you.
A little research goes a long way.
<I>Nick is a CFP practicing in Midland, WA and a part-time writer.
