Boutique advisers hand back AFSLs

AUPFS chief executive Steve Davis says that while self-licensing may be an appropriate model for some advisers “who value their independence”, he warned that some have gone down this path only to become “embroiled in administrative turmoil”.

“We have had a few previously self-licensed advisers join us recently, as well as a few others who are currently in talks with us, and they have all complained about the huge additional workload caused by the self-licensing responsibilities,” Mr Davis said.

“These advisers typically say they were spending nearly one third of their time working on administration, compliance and risk management tasks just to maintain their licence, instead of spending time in front of clients or growing their business.”

Mr Davis said the former boutiques were enticed into a dealer group environment for several reasons, including supposedly lower PI premiums as well as a “range of high-touch licensee services” while also being able to retain access to a broad APL and platform choices.

The dealer group head also warned that self-licensed advisers seeking to hand back their licences need to understand the implications for liability and PI insurance, adding that they may need to purchase PI run-off cover.

The comments follow a similar movement by former self-licensed boutique Hado Investments to join Premium Wealth Management’s iPremium network.

Australian Unity made an acquisition bid for Premium Wealth Management in July.