Insto-owned AFSL compromises advice
Having an institutionally owned Australian financial services license (AFSL) can comprise everything from the advice clients receive to the product advisers sell, one financial adviser believes.
Owner and principal of Aon Hewitt-backed EZI Protect, Mick Sykes, said he would not like to see advisers going down the path of institutionally owned AFSLs as they are bound their approved product lists (APL).
"Where I stand, Aon is not an institutionally-owned organisation, so that gives us more flexibility to choose who's on our APL," he said.
"But if it's an institutionally owned thing, then maybe that institution's product is always going to be on there.
"It's a little bit like multi nationals buying farms so they can control everything from the milk production through to what goes on the shelf," he said.
But general manager of finance and wealth management at Ausingroup Mark Morcos said there has got to be a framework on what qualifies on the APLs.
"There's got to be a process that you go by in order to get any product on the APL or to get approved by the investment committee," he said.
"It's not just like you can put anything on the APL. There are rules and regulations on what you can and can't put on the APL from an AFSL point of view."
Recommended for you
As the first quarter of 2024 comes to a close, Money Management looks back on the corporate regulator’s bans and AFSL cancellations in the financial advice sector.
Insignia Financial is holding ‘relatively steady’ onto its rank as Australia’s second-largest financial advice licensee after the Godfrey Pembroke exit but Count is hot on its heels.
Liberal senator Slade Brockman has said the government needs to have a “cold hard look” at the level of regulation in the financial advice space and the costs of running a business.
FAAA chief executive, Sarah Abood, has warned changes in the first tranche of the QAR legislation around advice fees documentation could create more work for advisers rather than less.