MEDIA RELEASE
The industry must confront an uncomfortable reality, according to AMAFA – that some advisers stuck in outdated licensee models may feel they have few viable options left but to go it alone.
AMAFA CEO Keith Marshall says this sentiment is increasingly shaping how advisers think about self-licensing, not always as a genuine aspiration, but as a way to exit arrangements that no longer feel fit for purpose.
“We believe many advisers are not leaving their licensee to pursue their own AFSL because they reject oversight, but because the value equation no longer stacks up,” Mr Marshall says. “They talk about things like high costs without corresponding high service, rigid systems with limited flexibility, slow decision-making, one-size-fits-all approaches to compliance, and attitudes that continue to treat them as distribution channels rather than partners.”
Mr Marshall says while it is understandable that advisers feeling constrained by outdated models may conclude the best option is to get their own licence, it is important not to romanticise the idea. Self-licensing carries significant regulatory responsibility and recent research suggests it can be expensive.
“CoreData Research has estimated that the true cost of self-licensing for solo advice practices can exceed $300,000 a year in some cases, when costs and lost client time are taken into account,” he says.
“The research also suggests some advisers may be underestimating the price of freeing themselves from their licensee, not only in tangible terms, such as fees, professional indemnity insurance and compliance support, but also in opportunity cost, and the mental load of being a responsible manager as well as an adviser, entrepreneur and business owner.”
Mr Marshall says ‘freedom’ does not have to mean carrying every burden personally. It can be about building a practice that is sustainable, scalable, profitable and compliant, without operational overload.
“For many advisers, the smartest definition of freedom is not becoming a responsible manager themselves, spending hours each week on governance, coordinating suppliers and hoping the framework holds under pressure,” he says. “It’s choosing a licensee that helps them run their businesses their own way – and spend the highest possible proportion of their week on client-facing work, without putting their licence and livelihood at risk.”
In practice, Mr Marshall says this means licensees need to deliver practical, adviser-led support, including flexible software choice, paraplanning support that restores adviser capacity, administrative assistance that removes bottlenecks, and genuine partnership and community that helps reduce stress and isolation.
“If the licensee model is to survive, adviser-centricity must be operational, not just aspirational,” he says. “Freedom shouldn’t be about feeling like self-licensing is the only option. It should be about enabling advisers to run compliant businesses the way they want to run them.”