Self-licensing on the rise as dealer group fees surge

The Adviser Ratings statistics for the week to 6 August revealed that the advice sector had seen a net loss of 20 advisers, with a further 34 practitioners switching licensees over the period.

The movement of national risk advice group Experien from Clearview Financial Planning to the TAL-aligned Affinia Financial Advisers made up the bulk of adviser switchers, but a further seven advisers left listed dealer group Count Financial to set up their own licence, while six more left IOOF-aligned Lonsdale and also opted to self-licence.

Privately owned dealer group Lifespan also saw five new advisers join its ranks, while the SMSF Adviser Network added five advisers after additional conditions put on the group’s licence had seen it cull adviser numbers earlier in the year.

Presenting the data in a recent LinkedIn video, Adviser Ratings founder Angus Woods noted that some larger licensees were losing a significant number of advisers as they repriced their offerings due to increased compliance costs.

Count and Lonsdale, which suffered two of the week’s biggest net losses in advisers, had seen numbers decrease dramatically from their peak at the end of 2018, with Count moving from 413 to 260 advisers and Lonsdale from 225 advisers in December 2018 to 186 at present.

Mr Woods said further price increases were expected across the sector, and that advisers should factor this into any potential move to join a new dealer group.

“It’s a pertinent point as advisers look to switch licences or sell their practice or client book to a new licensee, that they should understand the capability set and what’s in place at the licence,” he said.

“We are seeing increases in prices across the board as compliance goes up ... I think the average price for a licence is increasing to about $35,000 to $40,000 per adviser.

“So, I guess if you’re paying under that you should be asking why are you only paying $20,000 or $25,000 – are there conflicts in place, what else is going on at the licence, are you getting the compliance support [and] the training support that you need.

“It’s something that’s an ongoing issue and we will continue to monitor pricing across the board.”

A total of 21,536 advisers remained on the financial adviser register as of 6 August, according to the firm’s data.