TO LICENCE OR NOT TO LICENCE
AUSTRALIAN FINANCIAL SERVICES.
Planners operating as authorised representatives often agonise over the decision whether to obtain
their own AFS licence. Burning questions can include: What is involved in getting a Licence and how
much does it cost? How much work and expense is involved in maintaining it? What else will I need
to purchase? Will it cost more than I am currently paying my Dealer Group?
Statements and Financial Resources
Procedures.
OBTAINING AN AFS LICENCE
Initial Preparation

AFS licensees are required to have the
organisational competency that is needed to
enable them to offer the financial services that
they provide as well as documented business
systems, i.e. policies and procedures for all aspects
of their business.
ASIC has the power to check on this during the
licence application process. The extent to which
ASIC does check depends on its assessment of the
risk associated with the applicant’s business having
regard to its size, the complexity of the services it
offers and the like.
Because ASIC can check, AFS licence applicants
should prepare these business systems in advance.
A short cut can be to acquire a customisable
special purpose Business Operations Manual (see
below).
Licence Application
There are 3 parts to the Licence Application:


An online Application Form – this is
completed using ASIC FS01.
Additional Proofs – these can include
Proofs in relation to Compliance
Arrangements, Representatives, and
Training Adequacy of Resources, Dispute
Resolution, Risk Management,
Compensation Arrangements, Research
and Benefits and some other complex
service areas.
The first step is to lodge the Application Form and
Core Proofs.
ASIC then assesses the risk associated with the
business as described above. Depending on the
outcome of its risk assessment, ASIC may then ask
for some or all of the Additional Proofs. Sometimes,
especially with straightforward applications, no
Additional Proofs are required.
ASIC can also make requisitions seeking further
information about any issues of interest.
Once ASIC is satisfied with the application, it issues
a draft licence.
Once the applicant confirms that the licence
conditions are acceptable, ASIC grants the final
licence.
Core Proofs – these include a Business
Description, People Proofs for each
Responsible Manager, an Organisational
Competence Proof and Financial
OCTOBER 2011
PAGE 1 OF 3
How Do I Prepare For Licensing?
MAINTAINING MY LICENCE
You can either do all the work yourself, or appoint
a consultant to assist you.
Provided you have access to the information that
you need about how to operate your licence,
much of the work can be done within your
business.
The Fold has a Do-It-Yourself AFS Licence
Application Kit which, when used with our Business
Operations Manual and Compliance Calendar,
provides all the business processes and template
proofs that are required to operate most
straightforward financial services licenses.
Cost
(incl. GST)
Business Operations Manual for
Financial Planners & Life Advisers
Compliance Calendar
From $1,650
The Fold Book Business Operations Manual provides
the guidance you need and The Fold’s regulatory
newsletters keep you up to date with changes as
they occur.
It is advisable to budget for some external
assistance with compliance – for a SME planning
business; we suggest a budget of say, $11,000 incl.
GST plus $2,145 incl. GST per adviser per year.
Cost
(incl. GST)
$462
Adviser Reviews (per adviser, per
DIY AFS Licence Application Kit
Total
From $2,145
$3,740
annum)
$5,702
External Audit (12-18 monthly)
From $6,600
Compliance/ Legal Support
From $5,000
What If I Need Help?
The Fold can assist to prepare your Core and
Additional Proofs for a fee, and can provide ad
hoc technical support to help you in your liaison
with ASIC.
Cost
(incl. GST)
(only as required by you)
WHAT ELSE WILL I NEED TO OPERATE
MY LICENCE?
You will need to replace the services that your
dealer group is providing to you.
From $7,700
These vary between dealers, and can include the
following:
Additional Proofs (as required)
$418/hour
Professional Indemnity Insurance - For a quotation,
call one of the following specialist brokers:
AFS Technical Support
$418/hour
Core Proofs
For more complex licences, The Fold can quote to
prepare the application and documentation.



NOVEMBER 2012
Michael Gottleib at Mega Capital,
Sydney
Bill Hogg, Jardine Lloyd Thompson,
Melbourne
Stephen Hughes, Strathearn Insurance
Brokers, Perth
PAGE 2 OF 3
Product Research - The Association of
Independently Owned Financial Planners provides
a cost effective Filtered Research service.
Software - Most advisers use XPlan or Coin. Contact
them for a quotation.
Override Commissions
And you don’t have to lose the override
commissions that your dealer group gives you
access to. By joining one of a number of
associations, e.g. the AIOFP, you can participate in
override commission arrangements.
WILL IT COST MORE THAN I AM
PAYING MY DEALER GROUP?
The above information should assist you to “do the
math”. We find that adviser businesses managing
over $30m in funds usually find it more cost
effective to have their own licence.
© The Fold Compliance Pty Ltd 2012
Author:
Claire Wivell Plater – Managing Director
The Fold Compliance Pty Ltd
02 8353 6604
NOVEMBER 2012
clairew@thefoldlegal.com.au
WHAT ARE THE RISKS AND
BENEFITS?
You will be 100% responsible for the financial
services that you provide. It will be up to you to
seek out the assistance you need to ensure that
you operate compliantly because there won’t be
a licensee looking over your shoulder any more.
On the other hand, with your own licence, you are
your own boss.
You own the clients. You can develop your own
product list. You can develop your own service
proposition. You are not locked in to using unwieldy
‘one size fits all” SoA and other templates.
You are free!
If you’d like our help, contact us:
Claire Wivell Plater
02 8353 6604
clairew@thefoldlegal.com.au
Charmian Holmes
07 3139 0560
charmianh@thefoldlegal.com.au
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