Powered by MOMENTUM MEDIA
moneymanagement logo
 
 

Planners should scrutinise potential licensees

advisers/compliance/financial-planning/financial-advisers/commonwealth-bank/

6 March 2015
| By Mike |
image
image image
expand image

A week after members of a Senate Committee pointed to the need for financial planning licensees to do compulsory due diligence on financial planning recruits, a compliance specialist has urged planners to do equal due diligence on any licensee they choose to join.

Catalyst Compliance managing director, Steve Murray has suggested that if financial advisers get it wrong when they join a licensee, the consequences can cloud their reputations for many years.

He said reputable AFS licensees had attempted to protect their licence by avoiding the authorisation of advisers employing sub-standard practices but it was now evident that advisers needed to be equally as careful in their selection of a licensee "as they may turn out to be a threat to the adviser's reputation and their professional future".

Murray said that it was unfortunate fact that most advisers were not diligent enough in scrutinising licensees and that their investigations were usually very shallow and confined to two issues - "how little will I have to pay to be authorised, and how little will the licensee interfere with the running of my business".

"Perhaps advisers should also think about what that licencee will look like on their CV in the future," he said. "Irrespective of the fact that an adviser has a blemish-free history, an association with a troubled AFS licensee can be enough to convince a new licensee to avoid that adviser — they don't know whether the adviser was one of the "bad" advisers or not and are not willing to take the chance."

Murary said AFS licensees were avoiding advisers whose CVs included licensees such as AAA, Morrison Carr or Storm and that "even Commonwealth Bank is no longer a plus on an adviser's CV".

Murray and Australian Capital Financial Planning managing director, Barry Parker suggested there were a number of steps planners could take to overcome the problem including accepting that low cost business models did not always represent the best outcome, asking for the latest licensee review, and talking to other advisers in a dealer group.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

The succession dilemma is more than just a matter of commitments.This isn’t simply about younger vs. older advisers. It’...

1 day 6 hours ago

Significant ethical issues there. If a relationship is in the process of breaking down then both parties are likely to b...

3 weeks 5 days ago

It's not licensees not putting them on, it's small businesses (that are licensed) that cannot afford to put them on. The...

1 month ago

After last month’s surprise hold, the Reserve Bank of Australia has announced its latest interest rate decision....

4 weeks ago

ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago. ...

4 days ago

While the profession continues to see consolidation at the top, Adviser Ratings has compared the business models of Insignia and Entireti and how they are shaping the pro...

1 week 5 days ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND