Dealer fee only part of equation when choosing AFSL
The dealer fee may have been one of the main criteria for an adviser when choosing an Australian financial services licensee (AFSL) in the past, but advisers are now placing a fiscal value on more abstract facets of what an AFSL can offer, according to Futuro Financial Services.
The non-aligned AFS licensee’s executive chairman, Dennis Bashford said advisers focusing on these different aspects other than dealer fees demonstrated maturity among advisers.
“Things like independence, the quality of the compliance regime, a good complaint and PI [professional indemnity] claims track record, an open APL [approved products list], high performing model portfolios, access to managed accounts, overall business and marketing support and so on are becoming much more important,” Bashford said.
Bashford acknowledged Futuro’s dealer fee was not the cheapest but said the rate of growth demonstrated that advisers looked to criteria other than the headline fee when choosing their licensee.
The comments came as Futuro announced it had appointed three practices thus far in 2017 after growing by one new office per month in 2016.
Bashford said the source of the growth had been diverse in terms of geographic location and the AFSLs advisers had come from, with two recent South Australian appointments of advisers who came from different institutional AFSLs set to form an alliance that would deliver economies of scale.
Bashford also said offering an open APL was attractive to advisers hindered by restrictive product and investment strategy options, while self-licensed and smaller dealer groups were hindered by costs of running their own licence.
AUTHOR
Malavika Santhebennur
Recommended for you
With an advice M&A deal taking around six months to enact, two experts have shared their tips on how buyers and sellers can avoid “deal fatigue” and prevent potential deals from collapsing.
Several financial advisers have been shortlisted in the ninth annual Women in Finance Awards 2025, to be held on 14 November.
Digital advice tools are on the rise, but licensees will need to ensure they still meet adviser obligations or potentially risk a class action if clients lose money from a rogue algorithm.
Shaw and Partners has merged with Sydney wealth manager Kennedy Partners Wealth, while Ord Minnett has hired a private wealth adviser from Morgan Stanley.
