If you’ve been waiting patiently for a resolution on the FOFA amendments in order to resolve an inadequate licensee arrangement for your business then thankfully your time is about to come and you can finally take the big step forward.
In my experience it would be fair to suggest that those of you that will be making the move once the new legislation on grandfathering has been passed are doing so because you have differing views on what it takes to grow and administer a professional advice practice.
This is why it is incredibly important that you don’t jump out of the pan and into the fire. This next licensing solution you decide on should be taken with a view that it will be supporting your business for the next five years.
So, using my crystal ball allow me to tell you what will be the number one factor driving the behaviours and decisions of this sector over the next five years – the goal to be respected as a profession in the broader community.
This is an incredibly complex and audacious goal with many factors to achieving this way out of your control, however I encourage you to research with sincerity how committed the prospective licensees on your shortlist are to playing their part to raise the professional standards of the sector.
Here are some questions to ask your prospective licensee shortlist:
- What is their history of professional indemnity claims or client complaints that have made it to FOS?
- Do they have any problems likely to surface in the future that may see them end up as a feature story on Four Corners?
- What is their PI excess? If it seems high to you then ask more questions as to why. It is best to be overly cautious and risk adverse.
- Does their Approved Product List give you comfort that you will be able to meet the Best Interest test when advising clients?
- How secure is this dealer group’s financial position and business model now FOFA is here?
- What are their education standards? Is there an aspirational and engaging professional development program to support their advisers in being the best they can be so that their clients receive great financial advice?
- Do they require their advisers to be a member of a professional association and subscribe to a code of ethics and conduct?
- Finally, think about the grandmother test. Would you comfortably refer nana to any of the advisers already in the group? How would she find their advice and client care?
In the search for your next licensee don’t make the same mistake twice. To quote the great contemporary American poet Maya Angelous: “I did then what I knew how to do. Now that I know better, I do better.”
As founder of Pinnacle Practice, Anne’s vision was to build a business that provided personalised and tailored advisory services to financial planning firms, licensees and financial services related product/service providers in order to help them achieve their growth objectives.
