AFSL Licensing Guide
An essential AFSL Licensing guide with support and resources for Financial Advice businesses in Australia.
Building successful practices for the future.
Dugald Braithwaite
Principal | 25 Years Experience
Since 1998 Dugald has delivered Management Consulting Services to the Financial Planning Industry.
Experience extends to supporting local & international wealth management clients with executive search, strategy, board reporting and large scale project execution.
Critical analysis of AFSL Licensing in Australia
In this series of articles, we will explore and analyse a variety of aspects of the Australian Financial Services Licensing (AFSL) market with the aim of assisting Advisers and Advice Practices make more informed decisions, or at least know the right questions to ask.
The analysis is aimed at selecting the right AFSL provider for your Practice. This is not a compliance guide.
Some of the key areas we examine:
- A brief history of the Financial Planning Industry and Dealer Groups in Australia
- R.I.P. Dealer Groups – the rise and fall
- Overview of the AFSL Market in Australia, what are your choices?
- Artificial Intelligence applications in Financial Planning
- Insights from industry leaders. Matthew Brown, EGM Advice with Personal Financial Services
Upcoming Articles:
- Critical checklist for reviewing AFSL’s – practical guide for Advice Practices, with template
- What are the Benefits and Pitfalls of Self Licensing?
- High level Review and Comparison of differing AFSL models – where’s the value?
- Insights from Industry Leaders – interviews with AFSL Management
- How to transition AFSL’s - Greener Pastures, a guide to getting the best outcome.
Quick links:
As a backdrop we start below with a brief overview of the Financial Planning industry in Australia and how we got to where we are today, in particular the part played by AFSL Service providers, previously referred to as Dealer Groups.
A brief history of the Financial Planning Industry
and Dealer Group AFSL's in Australia
('excerpt only')
Back in the the late 1990’s the Financial Planning Industry ‘Dealer Group’ market was a fledgling industry seeking to carve out a space in the Investment, Superannuation and Insurance sectors.
Some suggest the birth can be directly linked to the introduction of the Superannuation Guarantee (SG) in 1992.
‘Dealer Groups’ (now referred to as AFSL’s) were established by major Insurers and Investment product managers with Authorised Representatives appointed to provide advice, superseding in most cases the ‘Insurance Agent’ agreements.
Dealer Groups were effectively a product distribution channel.
Product sales and super and insurance switching were rife, and the idea of wholistic advice to clients (let alone retirement advice) was just being born. The market was extremely fragmented with thousands of single Advisers previously Insurance Agents now running their own business (books) as ‘Financial Advisers’.
To do so, all they required was RG146 accreditation, the equivalent of DFP 1-2 and away they went. Further accreditation, DFP 3-4 allowed for more sophisticated (product sales) advice. Completion of the CFP designation (all 8 DFP units) was rare.
in 1998 there were approximately 120 CFP designated Financial Planners in Australia
The Banks obtained Licenses around this time and set up shop, going on to become the largest training ground in the industry for two decades. Albeit I was reliably informed one major in the early 2000’s had one product cancellation or outflow every month for every new product sale (Investment or Insurance).
This didn’t really matter because the upfront commissions were so large.
Continue reading the full article here - A brief history of the Financial Planning Industry and Dealer Groups in Australia
You may also wish to read our article – ‘R.I.P. Dealer Groups' - The Rise and Fall of Financial Planning Dealer Groups in Australia
Full AFSL Licensing Guide series:
Dugald Braithwaite
Principal
Since 1998 Dugald has been in Executive Recruitment and Management Consulting to the Financial Planning Industry.
Experience extends to supporting local & international wealth management clients with executive search, strategy, board reporting and large project execution.