Rob Coyte from Shartru shares his ideas on what to look for in an AFSL

In this article I go through the key considerations for a financial adviser who is choosing an AFSL.

  1. It’s important that you see the world in a similar way that they do.
    1. Looking through the same lens should mean consistency with decisions they make in the future. Often advisers simply focus on what the AFSL is doing at the present juncture of time.
    2. In a large part this will determine how management will view what is appropriate behaviour for other advisers in the group.
  2. Ensure that their service offer suits your business.
    1. Can you do what you need to do in front of the client?
    2. What is the commerciality to their approach for providing financial advice?
    3. Do they promote business efficiencies through technology platforms and processes?
    4. Do you have access to mentoring or other expertise within the group that will assist you providing advice to your clients?
    5. What is the structure of the AFSL’s advice procedure?
  3. Compliance
    1. It’s important to remember the reputation of one becomes the reputation of many.
    2. What are the details of the AFSL groups monitoring and supervision program?
    3. Have they been subject to any ASIC or AFCA actions?
    4. Has the AFSL had a steady growth in its business or has it been rapid? In the case of the later do they have the personnel on the ground to ensure the ship is being tightly run?
  4. What is important to management and the board?
    1. Leadership is essential not only for what they do but for what they allow.
    2. What is the breadth and quantity of the experience of key personnel?
  5. Look for an AFSL that provides value not just the cheapest cost.
    1. Would you be considering this AFSL if it was not mandatory to be licensed to provide financial advice?
    2. Can the AFSL provide the services for you and the remainder of the group based on the fees that they are charging?
  6. Professional Indemnity insurance
    1. How does management assess the appropriateness of the policy ensuring the entire group is protected?
    2. Does the policy satisfy ASIC requirements under RG126?
    3. Are all your business activities covered by their policy?
    4. What is the amount of coverage and any applicable excess?
    5. What are the key terms or exemptions of the policy?
    6. Ascertain whether there are any restrictions or levies placed on you in regard to PI if you decide to leave.
  7. Do the future plans of the licensee match the life-cycle of your business?

Happy hunting.

Rob Coyte is the CEO of the Shartru group. He can be contacted on 1300 478 424 or