Boutique financial planners raising the white flag
Compliance consultant Christina Kalantzis has seen an uptick in the number of boutique financial planners looking to "hand back" their Australian Financial Services Licence (AFSL) in recent months.
"A lot of my work at the moment is handing in AFSLs [to the Australian Securities and Investments Commission]," Kalantzis said.
Many of the "small and boutique guys" who have contacted Alexis Compliance and Risk Solutions are looking to sell up their client base and become an authorised representative of a larger AFSL, Kalantzis said.
"I've never had these conversations before with AFSL holders. This is the first year [it's happened]. I've had five a month in the last couple of months," she said.
While some of the planners approaching Kalantzis have made up their mind to cancel their licence, others are seeking advice from her "so they know how to make a decision".
"Some boutiques are seriously considering what their future's like and the operating expenses of running a businesses," she said.
A spokesperson for ASIC said there have been 180 "voluntary applications to cancel a licence" to date in 2011-12 (as of 10 May). This compares to 280 in 2010-11 and 259 in 2009-10.
The process of a licence cancellation involves reviewing the internal complaints of the licensee and contacting the external disputes resolution scheme, the spokesperson said.
While AFSLs are sometimes cancelled conditionally by ASIC, they are not kept open for more than a year, added the spokesperson.
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