Adviser: Why I handed in my AFSL

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Troy Edmondson, a previous winner of the AFA Adviser of the Year award is handing back his AFSL and joining the newly formed national risk specialist dealer group Affinia.

Edmondson said, “After holding the Licence for a number of years, the compliance obligations were taking me away from running a specialist insurance and estate planning practice. I want more time with my clients not less.”

He said the obligations were not necessarily difficult, but extremely onerous, and as the practice grew he was “dragged more into licensee land”, despite outsourcing their compliance. “If you look at what’s happening now with PI costs increasing as well, that was a concern to me. So I looked around at options because I really wanted to be an adviser full time.”

Since the end of January this year, Edmondson has been talking to all his advisers to give them plenty of time to decide what they wanted to do. A number of existing advisers under Edmondson’s Queensland-based Business & Estate Planning Specialists Licence are also joining him at Affinia.

“I think it’s a difficult time going ahead for boutique licensees…If you get to the stage where you have ten to 50/100 external advisers, I think it’s going to be difficult because you lack that scale.” Edmondson didn’t want to go full time into running a licensee and growing in scale, so he decided to be an adviser full time.

He says now that he has made the decision, there is no way he will go back. “I thought it would be great to have our own AR, and it was good fun in the early stages, but it’s become more and more onerous…I’d rather concentrate on being a business proprietor rather than running an AFSL at the same time.”

Affinia general manager Craig Parker said Affinia would “remove the noise” so that advisers could do what they do best – see more clients.

“We are serious about our network enjoying a seat at the table and having a voice to the continued design and evolution of Affinia. Troy brings very strong expertise as we evolve into a major risk specialist dealer group of choice.”

Edmondson said the Affinia offer is competitive, and that the group is clearly keen to help risk advisers run their business, and profitably. Having an open APL not aligned to a big institution was a key differentiator that enables advisers to pick the products that best suit a customer’s need.

“The daily blog I receive from Keith Abrahams tells me to pursue my passion, so that’s what I decided to do. Running the business and providing advice to small business owners around their risk management and estate planning needs is what I am passionate about, and joining the Affinia group enables me to do that.”

  • Michael on 1/07/2013 12:44:55 PM

    None of us are going to convince the other, only experience does that. We have had our own AFSL for 25 years. We "own" the client because we have looked after them faithfully and provided fair value amongst the ups and downs. We also know personally each of our 4 ARs and their personal situation and investment philosophy. Compliance is a necesary evil to be dealt with like paying tax. Neither is a reason to not have an AFSL.
    Being independent means we can make our own informed decisions and to date that has not caused an issue with PI, compliance or whatever.
    Being a member of the AIOFP and its Filtered Research Committee, use of Mercer research, and other independently sourced information, also means that we are not reliant on institutional advice that may have its own inherent bias, despite intentions to the contrary.

  • Gareth Hall on 28/06/2013 8:14:55 AM

    I agree Pat. I'm just not sure why you would compare having your own AFSL to being an employed bank planner. I understand your point but was just noting that the CBA will compensate anyone who has lost money where if clients are clients of a small AFSL that AFSL would not have the resources to compensate and PI does not cover fraud, hence in fact the big AFSL provides clients with some protection. I made no comment about you or I doing the wrong thing by clients and I said each to their own, whatever makes you happy.

  • Pat on 28/06/2013 6:22:59 AM

    Gareth, don't know what your on about mate. I am not assuming you or I am going to screw over clients. I am talking about the fact that CBA planners are being tarnished with the EU and publicity associated with the planners who did wrong and management who tried to cover up.

  • frank smith on 27/06/2013 8:01:33 PM

    What a waste of all those years and the life balance freedom they should have provided. You should have talked to me - you'd still have your practice and be making more money.

  • Gareth Hall on 27/06/2013 5:37:12 PM

    Pat, the clients of CBA will be compensated - no question. That is actually a benefit is it not? If a rogue planner has his own AFSL the clients are stuffed! My clients couldn't care who my AFSL is, so long as the advice they get is good.
    Each to our own.

  • Gareth Hall on 27/06/2013 5:33:46 PM

    There is neither right or wrong in this discussion. I just think the risks of running your own AFSL are high when you can outsource it to someone else. Each to their own. And the client owns the client, not us or the AFSL!

  • John Pointon on 27/06/2013 2:03:20 PM

    I'm the spoon feeder. It's not hard or expensive. The trick is to find compliance solutions that are operationally and commercially sensible.

  • Pat on 26/06/2013 3:30:09 PM

    Gareth, why would you want the risk of being part of a large dealer group that potentially gets tarred by the same brush of an EU handed by ASIC; run through the media because of the poor practices of a few?

  • Peter Johnston - AIOFP on 26/06/2013 1:07:53 PM

    This issue is politically sensitive[as we have both large and small licensees has members...] but i personally think you are better to have your own AFSL, outsource what you dont want to do and retain control of your practice. Remember the 'golden rule of economics', those who control the gold make the rules....

  • Gareth Hall on 26/06/2013 10:41:48 AM

    Why would you want the risk associated with running your own AFSL if you can find a suitable alternative - one that doesn't make you compromise?

  • Mark Thompson on 26/06/2013 10:35:16 AM

    I have my own AFSL, and with only one adviser, me and one PA; and I love it. I pay to be spoon fed on compliance. It also helps to have a smart PA. An open Risk APL is not a bad alternative.

  • John Marshall ADipFS on 26/06/2013 10:32:41 AM

    Peter
    This is what Troy has done I would believe.

  • Peter Johnston - AIOFP on 26/06/2013 10:11:45 AM

    Ever heard of outsourcing the functions you dont want to do to third parties Troy......?

  • Another Mad Planner on 27/06/2013 9:56:41 AM

    Why would you hand ownership of your clients and all your hard work to a build a succesful business to then say it is too hard?

    I have my own AFSL 2 advisers and it is very easy to manage.

    If your practice is very large then you should be able to outsource the things you do not want to do. At he end of the day that is what all the large licensees do.

WP forum is the place for positive industry interaction and welcomes your professional and informed opinion.

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