Advisers at risk under licensees with fees cheaper than Dover

There are a number of licensees that offer fees that are cheaper than what Dover Financial Advisers offered that are potentially putting advisers at risk, according to CountPlus.

Speaking to Money Management, CountPlus chief executive, Matthew Rowe, said there were a lot of licensees that offered very cheap licensing solutions and that there was a potential lack of understanding of what their real obligations are under supervision and monitoring.

“At one end we’ve got over engineering – over legalistic interpretation of compliance – and at the other end licensees that have really cheap offers out there that outsource compliance, and there’s probably regulatory arbitrage there. They’re probably not meeting requirements as a licensee and potentially putting advisers at risk,” Rowe said.

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“We know there are licensees out there at the moment that have fees cheaper than what Dover had. We don’t think that’s a sustainable offer and not in advisers’ interest to be going down that path and not in consumers’ interest.”

Rowe said with the work that still had to be done with the compensation scheme of last resort (CSLR), he could potentially see a capital requirement to mitigate the moral hazard within CSLR.

He said a firm with no capital that was put into administration or liquidation would then have consumers that suffered under CLSR and the rest of the industry would have to pay for the people that were not acting in good faith.

“I think if there’s a capital requirement potentially that comes out around this to mitigate moral hazard that’s a decision for the government,” he said.

“I think licensees should have an obligation to demonstrate that they do have capital in case there is poor behaviour and back themselves and not relying on professional indemnity insurance, and licensees need skin in the game to support advisers and consumers so that if something does go wrong they stand behind advice and not just put the entities in liquidation and the consumer loses out on the result.

“If that comes about that could shake up the licensee landscape.”

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More jibberish coming out of his mouth. Just trying to substantiate why his fees are so high compared to the market.

HAS LOST MORE THAN 100 ADVISERS IN THE PAST 12 MONTHS. PANICKED. soon to be followed by many more desperate AFSL holders.

what did the oracle say?

imploding /collapsing/ time bomb, take your pick. haha so glad am finishing up soon.

Well Mr Rowe, as advisers we've had to find innovative ways to do our job while not letting quality drop, and without passing on too much of the inflated cost burden of compliance to clients. Innovation and cost cutting is in part the answer. Dealers need to do the same. My PDM comes from his high level CBD office to visit my humble suburban practice, but he could easily be working in a cheaper office also in the suburbs - why the need for all these flash offices and ' management' levels - do they add any value?

Of course they add value. The high level city offices are close to great restaurants and bars but more importantly well away from the suburban adviser riff-raff.

Yes jibberish and substantiation. Good way to knock out the self licenced as they go for less competition. The whole financial planning licencing regime is a big joke for too many people to make too much money by not really doing anything. The accounting profession seems to manage without this convoluted structure paying way too many too much for nothing that really benefits the end client (except higher fees so advisers can survive).

Yet another dealer group lobbying to maintain their control over advisers, so they can push more inhouse product. And yes, white label platforms and SMSF administration services are inhouse products.

Rowe's duplicity on this issue illustrates why he was such a failure as FPA President and FASEA Board member.

you aren't looking at it very well. Rowe was a spectacular success at the FPA, from a dealer group perspective. he jabbed his knife big and deep into the adviser din't he. so yeah. he wan't out to do us any favors matey. still not. he don't care about de advisers or da clients he care about FUM and selling more.

why all the geniuses reviewing financial advice don't see the AFSL structure as the biggest impediment is beyond me.

Fear based “lock down” comments for his advisers

Learning from the pollies how to control the sheep

This from a man offering two years fee free to entice advisers. Hilarious.

Sooooo, this is an infomercial. Amazing how some of the favoured sons of the FP industry get carte blanch to push their own barrow. Was this a pi=aid for article? How about some transparency around who gets published. Of course I should not expect the same level of disclosure from the journalists as we do from financial advisers. What a crock.

Basically all Brochure delivery managers

Wow, using fear to lock in advisers. This has to be an all time low for any AFSL holder. Any business person worth their weight knows that you retain clients through the value you deliver, not fear. Smart people see through it, are resentful and will ultimately stop buying from you. I can wait until individual registration arrives and dealergroups start taking a look at their own value propositions to advisers. Most of them right now are rubbish.

he must have a lot of accountants leaving and is trying to scare them into staying.

What are the current fees for Dover?

Gee and you wonder why Advisers are leaving. Financial Planning will never be a profession when those in authority are either conflicted or have no spine. This guy would fail his own test and I wouldn't promote being on the FASEA board either, it would be like calling yourself an intellectual because you have read Das Kapital and follow Klaus Schwab.

I think the real issue is the extreme compliance issues in the industry driving up PI costs, and ASIC costs and admin costs. Lets target the real issues...

Fact check please. Dover's fees were not cheap at all. Possibly only when they started out and were much smaller. Because they charged a flat fee (way ahead of their time) it was 'cheap' relative to the big volume and churning advisers as they had to pay a percentage of their commission. Conflicted models. Dover did not distinguish nor promote size. It was about quality. In reality, they actually provided great value to advisers in particular in the compliance space. Every SoA was checked, guidance and advice given and it was ensured that it added value and was in the clients best interests. The fact that they did indeed make an error in judgement in their FSG which they were happy to rectify. But ASIC used them as a scapegoat to look powerful as they couldn't touch the all powerful banks. What happened was a travesty to integrity and the financial services industry. It has gone rapidly down due to misunderstanding and red tape. Correct facts and common sense do not prevail.

I was unaware of any of that. Thanks for sharing.

100% agree. My current licensee costs more and is less onerous than Dover ever was. Paying more doesn't guarantee greater compliance/better licensee service. ASIC got McMaster cos he was arrogant.

I actually find you have better compliance in smaller licensee. This is my experience.....When you get to a certain size you naturally require auditors to audit the auditors that audited the process that those auditors used to audit advisers. Those first level of auditors will of course report to the audit manager that reports to the area manger that reports to the State manager who reports to the secretary of the national managers assistant. Of course it's the adviser who is paying for all these layers. When you've got a simple question if a RoA or SOA is required, they'll all be busy...despite having 14 compliance staff. Now possibly, they'll call you back in a fortnight, but it's too late by then. That's when I left and went to dealer group number 2 in my life.

advisers have spoken. exit march has gone from an exodus to a stampede.

How are we at the point that people think it's acceptable to charge $1,000 per week to summarise RG's to us? How can they demonstrate that this meets standard 7 as being fair and reasonable? Start telling people on the street how much you pay for licensing and see their reaction.

Another ticket clipper coming out to scare Advisers into remaining in the current licensing regime. Who are these people that tell Advisers what to do. The only way out of this is to get rid of licensees and and have single licensing under the Disciplinary Body.

his business is collapsing. accountants are saying get lost and exiting. he is panicking. many more afsl holders to come, they will go cap in hand to the government to put more shackles on advisers.

they will blame advisers for not staying the course "and not enduring " for the best interest of the client and just abandoning their clients in a 1 in a 100-year pandemic. just watch the narrative turn and to blame advisers for leaving.

I was once a Count AR and decided to leave them for Dover. My fee was cheaper with Count as I was starting out and Count took % of my business and I had to pay more for Dover's flat fee. I moved because Count was owned by CBA and I wanted to be a non-aligned adviser. Even though Dover was more expensive for me then, I felt it was worth it. All my SOAs get checked. No other licensees provide this service. How could you expect zero bad advice if you only get checked for 3 SOAs a year out of the 50 or 100 that you have written? Dover had the best model. Zero bad advice still so far and it's a shame they had to fold. Please stop spreading misinformation Matthew Rowe. Shame on you.

Exactly right. How can any other Licensee know if all advice is compliant if they cant/dont check all advice. A licensee is only as strong as its weakest adviser.

I wonder if ASIC considered whether Advisers are at risk of failing financially under licensees with fees cheaper than Dover?

Get rid of AFL licenses and have all advisers licensed directly with ASIC, then the parasite will be gone.

This would solve many of our issues, but the pushback from the licencees on this is massive, they know they have a shrinking market and only the cannibals will survive. If individual licensing went ahead there a lot of dead wood in those trees. Why do we pay asic to regulate us and the licencee to oversee us as well? What are all these changes for if not to give less oversight to us...we are jumping the hoops the government has put in front of us, where's our quid pro quo? We are going to be more highly educated than asic staff, compliance staff, bdms, basically anyone else in the financial industry, we don't require apron strings anymore.

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