Dealer fee only part of equation when choosing AFSL
The dealer fee may have been one of the main criteria for an adviser when choosing an Australian financial services licensee (AFSL) in the past, but advisers are now placing a fiscal value on more abstract facets of what an AFSL can offer, according to Futuro Financial Services.
The non-aligned AFS licensee’s executive chairman, Dennis Bashford said advisers focusing on these different aspects other than dealer fees demonstrated maturity among advisers.
“Things like independence, the quality of the compliance regime, a good complaint and PI [professional indemnity] claims track record, an open APL [approved products list], high performing model portfolios, access to managed accounts, overall business and marketing support and so on are becoming much more important,” Bashford said.
Bashford acknowledged Futuro’s dealer fee was not the cheapest but said the rate of growth demonstrated that advisers looked to criteria other than the headline fee when choosing their licensee.
The comments came as Futuro announced it had appointed three practices thus far in 2017 after growing by one new office per month in 2016.
Bashford said the source of the growth had been diverse in terms of geographic location and the AFSLs advisers had come from, with two recent South Australian appointments of advisers who came from different institutional AFSLs set to form an alliance that would deliver economies of scale.
Bashford also said offering an open APL was attractive to advisers hindered by restrictive product and investment strategy options, while self-licensed and smaller dealer groups were hindered by costs of running their own licence.
AUTHOR
Malavika Santhebennur
Recommended for you
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
Having peaked at more than 40 per cent growth since the first M&A bid, Insignia Financial shares have returned to earth six months later as the company awaits a final decision from CC Capital.
