Qualified Support for Individual AFSLs

Should all financial advisers be individually licensed?

  • Yes (59%)
  • No (30%)
  • Not sure (11%)

Advisers have lent their qualified support to the concept of moving the industry to an individual financial services licensing regime.

As we go to print, 53% of those taking our latest poll support the contention that all financial advisers should be individualy licensed. Three in ten (32%) are against such a move while 15% are unsure.

This question stems from the recent call by Connect Financial’s Paul Tynan for the industry to move to an individual AFSL model (see: Call for Individual AFSLs…).

It was pointed out to Risknfo during the week that with the advent of the Financial Services Reform Act in 2003, it was anticipated by industry stakeholders that most advisers would choose to take out their own AFSL. But that did not eventuate. Instead, most (but not all) advisers elected to operate their business under the banner of dealer group licensees in order to effectively outsource the regulatory and compliance requirements that were seen as an unnecessary burden for an advice business to carry on its shoulders.

…the best interest duty puts the responsibility fair and square on the shoulders of the adviser

Times have changed since 2003, notably with the introduction of the Future of Financial Advice reforms in 2013, which heralded the client best interst statute. One adviser has noted in this debate that “…the best interest duty puts the responsibility fair and square on the shoulders of the adviser.”

Elsewhere, it was pointed out that tax advisers, lawyers, doctors and builders are all individually licensed: “If we are to be a profession as everyone would like us to be, then its high time,” noted the adviser, arguing for individual licensing.

Others are less convinced a move to individual licensing is a good move. Regular contributor, Jeremy Wright noted, “Every idea has merit in one form or another. The difficulty lies with incorporating that idea into the bigger picture and foreseeing the implications, both positive and negative.”

A 53% vote in favour shows solid support for the idea of individual licensing and we will leave our poll open for another week for you to add your voice to the debate…



  • Jeremy Wright

    I made the comment that a move to individual licensing is fraught with danger, comes from some experiance of what is involved in this area and the implications.

    Many advisers may not realise what is involved and that their fees they pay to their dealer group is heavily subsidised, as the cost, time and knowledge required to fully comply with the seemingly endless regulations, will need to be borne by the adviser themselves if there is no longer any affiliation with a larger AFSL who can absorb these costs and utilise their in-house people to make this area workable, based on a mutually profitable outcome.

    The world we live in can be broken down to;
    1) An ideal world.
    2) The real world.

    The first world only exists in children’s minds and left wing loonies cavernous spaces between their ears.

    Do not wish for something that could come back and bite you hard and this idea of individual licenses could be the biggest bite advisers ever take and could kill off their Businesses with Red Tape overload, plus increased costs that will drive them out the door.