MEDIA RELEASE
Some licensees continue to use outdated tactics in an attempt to prevent advisers from leaving, according to AMAFA.
“We are seeing some licensees using every trick in the book to try to block adviser exits,” says AMAFA managing director Keith Marshall. “Frankly, this kind of behaviour does not align with the expectations of a modern licensee.”
Mr Marshall says that, as well as dressing up exit fees as professional indemnity (PI) run-off cover, some licensees are also weaponising exit audits.
“They insist on conducting broad, long-range file lookbacks when an adviser signals their intention to leave,” he says. “Those exit audits are then used as leverage to delay or withhold references.”
Licensees are required to respond in writing to a request for a reference for an adviser from a recruiting licensee within 10 business days, or up to 30 days by mutual agreement.
“This is an ASIC requirement,” Mr Marshall says. “However, some licensees argue that because they have not recently audited an adviser, they are unable to provide a reference. If a licensee’s oversight has not been fit-for-purpose, that failure sits with the licensee, not the adviser.”
If these tactics fail to convince an adviser to stay, Mr Marshall says some licensees resort to disparaging the recruiting licensee.
“Unfortunately, none of this behaviour is new,” he says. “It has existed in the industry for many years but has no place in a modern licensing environment.”
Advisers should remain with an AFSL because the relationship adds genuine value, including supportive leadership, fair commercial terms, practical compliance support, and a true partnership focused on better client outcomes.
“If a licensee is doing its job properly, it does not need fear, delay, or friction to retain good advisers. The relationship itself should be enough,” Mr Marshall says. “And if a licensee is no longer the right fit for an adviser and their clients, advisers should be able to transition without artificial barriers.”