What Growth Strategies will Licensees pursue in a post-FASEA world?

It appears the simple answers is Licensees will chase “Existing Advisers” to grow their networks.    If an AFSL has the resource to implement and manage a Professional Year Program, they will supplement this growth by taking on recent University Graduates as “New Advisers”.

The key to successful development of both Existing and New Advisers is “Individual Professional Education Plans” which are FASEA compliant.  To be effective, these Plans need to work out the most efficient timelines and pathways of least resistance based on the individual’s ‘starting point’ in terms of education and professional experience.

Professional Year

Licensees of all sizes face the challenge of meeting the “Professional Year” (PY) requirements of the FASEA Standards.  The PY has four parties which are the:

  • Provisional Financial Adviser
  • Supervisor (Financial Adviser)
  • Licensee
  • Retail Client

To meet its obligations under the FASEA Standards, Licensees will need to adhere to the process and procedures of a compliant Professional Year as stipulated in the associated Legislative Instrument.    For many Licensees, this will be a burdensome process as it will require allocation of financial, technological and human resources.

Licensees have indicated they will either need to increase their internal education and training capabilities, or partner with a dedicated training and education provider.

Adviser Growth Strategy: What are some of the key questions?

The FASEA Standards have created a unique situation in which the ability to grow an Adviser network under the current AFSL structure will now take considerable time, effort and training.  The questions I am being asked by Boutique Licensees (AFSLs) are:

  1. How do we grow our Adviser Network – acquisition of Existing Advisers, organic growth through New Advisers, or a combination of both?
  2. If New Advisers, do we target recent University Graduates interested in a career in financial planning to accelerate the onboarding process?
  3. How do we minimise ‘leakage’ of New Advisers over time (avoid the ‘train and drain’ trap)?
  4. Do we have the resources, commitment and desire to retain the AFSL in an ever increasingly compliance-orientated market?
  5. Do we have the capability to develop, implement and manage a Professional Year Program?
  6. Do we, as a Licensee, want to remain a Licensees? Why/Why not?
  7. Who is our target market/s for advice? Are we in a unique position to help them and why? Will our service offering be commoditised or is our comparative advantage enough to sustain profitable pricing levels over the medium to longer term?
  8. Does the changing financial advice landscape (FASEA, Hayne Royal Commission outcomes, fees structures, etc) create opportunities we can take advantage of due to our organisational uniqueness?
  9. What are the ‘pain points’ for others in the industry and is there an opportunity to provide a relevant and commercial solution to them?
  10. How can we support the FASEA education pathways, Professional Year (PY), and National Exam requirements and remain compliant and profitable?
  11. How will potential outcomes of the Hayne Royal Commission impact our business model, and importantly, how will it affect the profitability of individual financial planning practices in the short, medium and longer term?

Entrepreneurial and forward-thinking Licensees are partnering with Integrity Education to determine how best to support their Authorised Representatives (ARs) in relation to Higher Education pathway planning, Adviser Growth Strategies, the Professional Year, exam preparation, CPD and so on.