More advisers are treading the path of the self-licensed and numbers are expected to grow once FoFA is bedded-down.
My Dealer Services (MDS), a support service provider for advisers seeking their own AFSL, says it has experienced a significant boost in demand as advisers seek to become self-licensed. Over the past four years, MDS has assisted in getting more than 50 AFSL’s for advisers, with the most dramatic increase in activity recorded in the past six months.
There are three main pushing points, says MDS chairman Don Wiggins. These are greater flexibility, independence and dealer group dissatisfaction.
He expects that once FoFA is bedded down and advisers realise that it is manageable, there will be even greater motivation for advisers to part from with their “often rigid” licensees. But to put more effort into servicing clients rather than licence management, advisers will have to make sure they outsource their back-office administration to a reliable business.
“The convenience of controlling one’s own destiny, but leaving the back office to others – at a cost usually far less than one that is currently required to be paid to the traditional dealer – is a compelling argument to take out one’s own AFSL”, said Wiggins.
“The CoreData findings that 23.3% of advises expect to switch licensees in the next 12 months with 14.3% intending to take out their own AFSL is being borne out right now and the industry can expect this trend to continue into the foreseeable future”, he said.
The rising trend of self-licensing
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