Greener Pastures

Have you ever left a job for the promise of greener pastures, only to find that it failed to live up to your expectations?

Perhaps the responsibility was too stressful, the money insufficient to compensate for the workload, or the job description just didn’t accurately reflect what it was you ended up doing.

It’s a common problem for employees, but it also helps explain why around 50% of businesses fail in their first year.

Put simply: the reality of owning a business does not always reflect prior expectations.

According to CoreData’s research, one quarter of advisers believe that having their own AFSL trumps all other offers in the market.

Some 24.4% of the 1558 surveyed named having their own AFSL as the most attractive offer – three times more than the next most attractive licensee offer (Charter Financial Planning, with 8.0%).

Yet in reality, many advisers fail to practise what they preach by leaving their licensee and branching out alone.

There is some evidence, however, that the perceived attractiveness of having an AFSL is translating into actual establishments.

Paragem’s wholesale AFSL, set up almost two years ago, has been growing at a steady rate and now has $140 million under advice. The group’s dealer services IFA network exceeds 200 licensees and around 1500 authorised representatives.

So what is it that’s stopping a mass exodus from Australian licensees?

Burningpants has a sneaking suspicion that it is for the same reason that many super fund members, despite wanting control, don’t go down the route of self-managed super (SMSF).

They perceive it to be too much hassle.

Likewise, one of the most common reasons for abandoning the SMSF for the APRA-regulated sector is the compliance burden. Many trustees just didn’t realise how much work was involved in managing their own super.

With the Future of Financial Advice (FoFA) reforms imminent, including new requirements for clients to ‘opt-in’ to receiving advice biennially and more stringent requirements for planners, perhaps setting up an AFSL is a bridge too far.

CoreData’s new report titled The Grass Is Greener, benchmarks the relative attractiveness of owning an AFSL vs joining a licensee; explores the reasons why advisers do set up their own AFSL – and whether their expectations were met.

The research will be available in August. For more information contact CoreData on 02 9376 9600.

One Comment on “Greener Pastures”

• July 7, 2011 at 8:40 am
  burningpants says:

  Do you own your own AFSL? If so, tell us about your experience – do you love it or are you finding it difficult to manage?

  Reply