The AFSL Market in Australia

The AFSL Market in Australia

AFSL’s and Licensing Choices for Financial Advice Practices

The Australian Financial Services Licensee (AFSL) market is broader and more complex today than at any time in history. Gone are the days of large institutional Dealer Groups dominating the market with thousands of Financial Advisers as Authorised Representatives.

The market is fragmented and diverse, in size, structure, services and ownership.

Recruit 2 Advice - Financial Planning Recruitment - AFSL Market in Australa

In this expansive overview of the AFSL market we will review the current landscape of AFSL services available to Advisers and Practices. What are the core services, possible additions, and advanced business service offerings emerging?

Plus, for those reviewing an existing AFSL, or seeking a new AFSL, we have included some recommendations from our AFSL Review Checklist*.

To begin, we have broadly categorised AFSL’s into segments, Large (50+ Advisers), Mid-Tier (10-50 Advisers) and what is now referred to as Micro (less than 5 Advisers), and in doing so, it creates an interesting picture.

Micro AFSL’s

According to Industry analytics company Wealth Data there has been some 450 new market entrants in the micro AFSL segment since 2020. This suggests that single Financial Advice Practices are self-licensing, or possibly 2-3 Practices are forming an alliance.

This is a peculiarly high number of new AFSL’s into the segment. Potentially driven by the large number of Consultants emerging since the Royal Commission in 2017  promoting Compliance and Audit, Outsourced RM, and / or full white label AFSL services to assist with self-licensing.

The self-licensed path requires capacity to fully benefit from the potential savings, perhaps value sits in larger 10 plus Adviser Practices or Accounting firms. We’ll delve into the detail of the benefits and pitfalls of self-licensing in an upcoming article.

Mid-Tier AFSL’s

Boutique or Mid-Tier AFSL’s offering core services are scattered across the market, some tailored with an Insurance focus or an SMSF focus, in the main they service wholistic advice practices.

This segment also includes the Accounting sector, plus self-licensed standalone Financial Advice firms with 10+ Advisers.

This is where the sub-segments really kick-in relative to AFSL ownership structures. These consist of:

  • Privately owned
  • Adviser/s owned
  • ASX Listed companies
  • Unlisted public companies

AFSL services provided to Advice Practices can be summarised to include:

Basic or Core Services

  • AFSL ownership and related obligations & risks
  • APL Management
  • Revenue Payment Systems
  • Risk management: Supervision & monitoring which typically includes, which typically includes Compliance support and Annual Audit – (SOA Reviews)
  • Professional Indemnity Insurance
  • Access to discounted education courses (typically Kaplan) and PD days


Possible inclusions:

  • Software and/or discount Xplan.
  • Para-Planning
  • Online Advice portal with templates and useful info
  • Marketing support and Collateral – Monthly Newsletter for clients
  • IT&T support with website / apps / basic system maintenance
  • Cyber Security support
  • Adviser Community
  • Events and Annual Conference


Large AFSL’s

Once purely the domain of the large institutionally run Dealer Groups, this category has expanded to include unlisted public companies, privately owned companies and stockbrokers (Non-AFSL’s providers).

ASX listed company’s (institutions) make up the top three with AMP, Insignia, and Count. Morgans and Ord Minnett represent the Stockbrokers coming in at 6 and 10 respectively.

With scale comes capacity to offer additional services and support to Practices, and this is where it becomes interesting. Many Large AFSL’s have evolved well-past the old Dealer Group Model and have emerged as Business Services providers, with AFSL services.

Relative to the emergence of these new Business Service providers, you may wish to view our associated article: R.I.P. Dealer Groups.

Atop of the core services listed above, the majority of the possible inclusions will also be provided. Either in a base ‘core’ service offering with add-ons, or a bundled service to include all the services.

The larger AFSL’s also have the IP and capabilities to offer additional services again to include such things as:

  • Access to Investment Specialist support & Research
  • Portfolio support (such as managed accounts of MDAs)
  • Structured Business Consulting programs
  • Business & data analytic tools / segmentation / cost of service
  • M&A and Capital Support / acquire/ merge / grow / succession
  • AFSL facilitated client ‘book’ acquisition
  • Digital Marketing ‘white label’
  • HR Support
  • Professional Year Programs
  • Xplan Discounts and customisation such as in / Threads / Templates / Support
  • Dedicated Transition Team and ROA/SOA support



Without a detailed examination, there a three main models:

  • Percentage based fee; circa 10% of Practice Revenue – you’d expect a large AFSL service offering as outlined above.

  • Fixed fee; range $20-50k. Small through mid-tier and large AFSL’s. You get what you pay for.

  • Combination - Fixed fee plus a percentage; as above, core services plus un-bundled additional services, pay per user.


AFSL Agreements vary greatly with services and fees and most will have additional associated costs such as technology fees, PI insurance premiums, ASIC levy and so on.

Licensees may charge a minimum annual fee, and larger firms can benefit from a fee cap.

Discounts may be applied during a transitional period (ROA/SOA support also)

AFSL Review and Transition

If you are reviewing the value of your current AFSL or going to market for an AFSL’s provider, your goal should be to assess compatibility in culture, range and cost of services.

This process should be driven intrinsically by one key question, can the AFSL services business partner deliver on your goals and strategic business plan.

AFSL Review Checklist

R2A has developed a 9 point ‘core services’ and additional services AFSL Review Checklist for Advice Practices. A Consulting Services is available to support Practices to assess, review and shortlist AFSL’s.

R2A focus on overlaying your Practice requirements and delivering on your strategic goals and business plan.

Before reviewing your AFSL, we suggest you follow these guidelines prior to commencing the exercise:

  • Business Plan; Make sure you have an updated 3-5 year business plan.

  • Information Memorandum; To provide to prospective AFSL partners.

  • Prepare your approach; What are your current pain points? What are your non-negotiables?

  • Current AFSL Agreement; Review exit clauses, and the ‘off-boarding’ requirements/process.

If you choose to DIY the exercise without Consultants and have landed on a short-list, we stress the importance of several excerpts from our AFSL Review checklist.

Its also important not to overlook the impact of fees and other costs such as PI, Xplan, CPD etc. We’ve listed below some of the considerations to keep in mind.

Good Fame and Character

  • Does the Licensee enjoy a good market reputation?
  • Have they had any recent regulatory undertakings or EU’s?
  • Has the Licensee had a significant decline in AR/CAR numbers in recent years?
  • What is longevity of their Advisers / practices – retention rate?
  • How experienced are the Senior Management team / decision makers?

(Don’t take their word for it - Check FAR register and conduct media searches).

Commercial Structure “Ownership”

  • How long have they been committed to the Australian market?
  • Ask to view strategic business plan.
  • Who are the major shareholders?
  • How diluted are the shareholdings (can a few individuals influence major decisions)?
  • What are the motivations of key shareholders (i.e. build to sell or other)?
  • How well capitalised is the business?

Compliance and Regulatory Approach

  • What is the market experience and depth of the compliance team?
  • What is their reputation of working with ASIC and their ability to manage on-going regulatory change?
  • Support to mitigate / solve risks?
  • Ask to meet compliance manager.
  • What format are client files audited?
  • How often are client files audited?
  • Do they use an Internal or external audit team?

Commercial Agreements - AR/CAR

  • Ask for a standard agreement prior to full assessment. Look at Termination clauses, restrictions, data collection etc.


In summary:

This is just a starting point of what to consider when evaluating an AFSL - listed are many more in our AFSL Review Checklist.

Overall, when reviewing the AFSL market for a service provider for your practice, the key factors are:

Our advice is know what you need and where value sits, be thorough, it could be a long marriage.


*Information on the legal regulatory responsibilities to hold an AFSL can be viewed on the ASIC website - What is an AFS licence?

AFSL Licensing Guide

Dugald Braithwaite - Recruit 2 Advice - Financial Planning Recruitment

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.

R2A Consulting – AFSL Review Service

R2A Provides Consulting services to Financial Advisers/Advice Practices to manage the AFSL Review process to short-listed meetings and review, through to final negotiated agreements.

Contact us to discuss any parts of the process you require assistance with.

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