Interprac reputational risk prompts self-licensing consideration
ASIC’s court case with Interprac is causing advisers to explore the possibility of self-licensing, according to My Dealer Services (MDS), as they observe the reputational damage it can bring to a practice.
Speaking to Money Management, MDS managing director Alex Euvrard said problems at advice licensee Interprac have shaken advisers and is highly likely to prompt adviser movement going forward.
Interprac Financial Planning is being sued by ASIC for alleged critical oversight and compliance failures around Shield and First Guardian investments where over 6,500 investors were advised to invest around $677 million of their superannuation in the two funds. Both funds have now collapsed, leaving people’s superannuation at risk.
ASIC is alleging Interprac failed to ensure its former authorised representatives Venture Egg (a corporate partnership), and Rhys Reilly Pty Ltd complied with the best interests obligations and failed to have adequate risk management systems.
Euvrard said the awareness that a licensee could come under fire from the regulator was highlighting the risk of their own practices being damaged by the brand association.
He said: “We are seeing consolidation at the AFSL level but also at the firm level because we’re seeing more people going self-licensed and expect this will rise as people move away from Interprac, we’ve had a number of inquiries already.
“Licensing is a broken system and doesn’t work.
“Advisers like self-licensing as a way to control the business and how they treat their clients without the scrutiny of a parent licensee, they want to move away from associative risk such as is happening at Interprac and they want to run their practice in a way that suits them rather than being dictated to by templates.”
As of August 2025, the number of single-adviser practices make up just 4.1 per cent of total advisers but 33.5 per cent of total AFSLs, according to Padua Wealth Data. While they are small firms, they have the greatest experience with over three-quarters of advisers (81.3 per cent) in these firms having 10 years’ experience or more.
Meanwhile, Euvrard said the upcoming adviser exits as a result of the education or experience pathway requirements will also cause an industry reset. Up to 15 per cent of the industry is forecast to potentially depart at the end of the year, according to latest ASIC figures, if they fail to meet the education or experience pathway requirements.
In accordance with the Corporation Amendment (Professional Standards of Financial Advisers) Act passed in 2016, individuals who are unable to meet the experience pathway criteria and wish to continue operating as an adviser past 30 December 2025 are required to meet higher minimum education and training standards to continue as a financial adviser.
Based on their FAR status, 2,326 relevant providers are yet to meet the new standards, meaning that up to 15 per cent of the profession could exit in the coming weeks.
He said: “Once the deadline has passed, next year will be massive. It could reset the industry in a good way or it could cause it to slowly burn out like a campfire on the beach. I’m positive but also realistic, it will be a huge year.”
With the exit of so many experienced advisers, the focus will have to shift to how the industry can work to bring in new entrants. Rather than focus on appealing to new entrants, Euvrard said attention should be given to fixing existing problems which deter candidates.
“We need to focus on making the industry an attractive place to be, at the moment there are some entrenched negatives that need to be fixed.”
AUTHOR
Laura Dew
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