Do you require assistance with financial planning or other complicated money-related procedures? Do not be concerned. There are several websites where you may receive advice. They help financial planning services that hold AFSL compliance licences and those in the process of getting their licences.
Australian Financial Services Licensing
The Australian Securities and Investments Commission grants Australian financial services firms the requisite legal license to execute their activities.
The creators of AFS licensing compliance provide sound financial advice and recommendations on the financial products their clients must invest in or acquire for their business. They encourage you to implement a plan that is formally recognised.
What Function Does an AFSL Serve?
To operate a business that offers financial services and products, you must first get an AFSL from the SEC. This includes advice on financial goods and other forms of counsel.
Advantages of Obtaining Your AFS Licence
This article examines some of the most important advantages for financial advisors with AFS licences.
Financial advisors who seek their AFS licence can position themselves as independent from large-scale licensees and dealer groupings, which is one of the primary advantages. However, the Royal Commission uncovered numerous examples of licensees incentivising advisors to propose items linked with the licensee regardless of their appropriateness.
With their licence, advisors are no longer restricted by the licensee’s list of allowed items. This is advantageous for clients since they are receiving independent financial guidance. Thus, financial advisors no longer risk getting conflicted compensation by recommending that customers invest in the licensee’s products.
Due to this enhanced independence, advisors with their AFS license have more freedom. Those who own their AFS licence are exempt from the restrictions imposed by dealer groups. In contrast, licensed representatives of dealer groups are frequently subject to regulations and limits set by the licensee governing what financial services the company can supply and the method by which they can provide them. This includes constraints on how financial advice is offered, such as product recommendations and the processes employed by the advisor.
Advisors with their AFS licence have greater control over their business and advice delivery. In addition, it permits advisors to adapt the advice to clients depending on their requirements, without licensing constraints.
Advisors with their AFS license are frequently in a position to develop more efficient and effective compliance measures than those enforced by large corporate licensees. For example, large corporate licensees impose stringent reporting requirements on authorised representatives and follow elaborate protocols and processes. This is because their regulatory systems must accommodate a large-scale operation. Similarly, approved representatives are frequently compelled to attend training programs irrelevant to their profession or the advice they offer.
In contrast, advisors with AFS licenses can streamline and better personalise their compliance processes to their operations. Likewise, advisors are not needed to attend training classes for items they do not intend to sell. This leads to efficient and effective compliance, leading to improved client advice. Additionally, AFSL compliance adds to a practical, honest, and equitable financial system.
Whether you are trying to establish your AFSL or just weighing up on whether you should continue with your present licensee, it is essential to investigate and access the appropriate team of professionals to ensure that your business knows the advantages, risks and costs of all suitable choices.
Ensure that you consult with an expert who deals with all aspects of the AFS license compliance (not just the application for an AFSL) to ensure that your business has the necessary information to make informed, strategic, and relevant decisions and, most importantly, to position itself for long-term growth.