The $70.5k saving from being part of a licensee

A new report from the Financial Services Council (FSC) has detailed what advisers value the most from their licensee. 

The green paper Value and Future of Advice Licensing, produced with research house CoreData, surveyed the key services provided by AFSLs and which are most valued by their advisers. 

Overall, 75 per cent of advisers are satisfied with the services they said they are receiving from their AFSL, which is up from 64 per cent in 2016.

In the first place is compliance support, help with complex regulatory requirements, and adhering to industry standards, which 87 per cent of advisers said is important to them. No advisers surveyed have said these two areas are of no importance to them.

This is followed closely by revenue payments at 86 per cent, then access to curated products that meet quality and compliance and quality standards on an approved product list (APL) at 74 per cent. 

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In fourth and fifth place is coverage via professional indemnity insurance and education and training at 72 per cent and 69 per cent, respectively. 

Licensee services which it lowers down on the importance list are advice technology, cyber security support, communication, technical services and practice development, although only practice development received a score of less than 50 per cent. Technical services has the highest percentage of advisers who feel it is unimportant to them at 14 per cent, followed by practice development at 12 per cent. 

Importance of licensee support to practices

Source: FSC, July 2025

Being part of a licensee also brings about cost savings due to the economies of scale and centralised support provided. On average, licensed practices save $70,500 annually through tools and platforms included in their licence fee.

“These savings scale with practice size, from $25,700 for smaller practices to $116,000 for larger ones. Advisers also gain an estimated seven extra hours weekly through licensees absorbing administration and compliance tasks, allowing them to pivot their focus on client relationships.”

Self-licensing

Looking at the breakdown of advisers, 450 micro-licensees have joined the Financial Advisers Register since 2020, and many are self-licensed with less than 10 advisers as they seek greater control over their practice. 

Some 93 per cent of self-licensees said that opting for this method allows them more flexibility, according to the report, and 47 per cent said it is more cost-effective for them.

“This shift towards self-licensing may also reflect frustrations with licensee fees, perceived inflexibility, and the uneven distribution of reputational risks associated with larger licensees. Additionally, technological advancements have made it easier for advisers to manage compliance and administrative tasks independently. However, the opinion of self-licensees remains split on whether self-licensing makes these processes more efficient and cost-effective.”

But the report flagged the areas of value where self-licensed advisers are seeking help from external providers are the same areas where licensed advisers see the most value from being part of an AFSL model. 

Some 40 per cent of self-licensed advisers want help with their technology and 38 per cent with their compliance, while for those still working with an AFSL, 52 per cent are satisfied with their technology and 72 per cent with their compliance.

Specifically on compliance, 70 per cent of practices said they manage over half of their compliance internally compared to 41 per cent of licensed ones, with most licensed ones only handling 26–50 per cent internally.

“Many self-licensed practices are seeking external support in the very areas where licensees have traditionally provided the greatest value. Rather than building these capabilities in-house, many practices are turning to a growing ecosystem of third-party service providers to meet their operational and regulatory needs,” the FSC said.