How self-licensing has changed the APL game

Mike Taylor

Managing Editor/Publisher, Financial Newswire

27 September 2022

Institutional influence over what products are on offer via financial adviser approved product lists (APLs) has changed dramatically over the past four years, with the greatest factor being the rapid rise in the number of self-licensed financial advisers.

While, four years ago, fund managers and other product manufacturers found themselves needing to navigate institutional and licensee gate-keepers to have any hope of having a product included on approved product list, these days they need a good adviser directory.

According to the latest WealthData analysis, the major banks and their associated licenses may have exited financial advice, but over 500 new licensees have been established since 2019, with the great majority of them being small self-licensed advisers.

And there has been no slowing in the rate of self-licensee set-ups, with WealthData principal, Colin Williams pointing to 100 new small licensees being established since the start of 2022.

Williams says that, on this basis, not all advisers can be regarded as equal in terms of the products and services they are allowed to offer their clients.

“The total market is 14,372 advisers across the different business models,” he said. “Where this gets very tricky for businesses who need to stay in touch with licensees and advisers, is the number of advisers who are now in smaller ‘self-licensed’ firms.”

Williams points to the fact that there are 4,654 advisers operating out of 1,426 small licensees at an average of 3.26 advisers per licensee.

“The challenge for service providers, in this case platform groups and fund managers, is finding and accessing the right licensees and advisers – those that can offer investments via a wrap, or those that can offer insurance, securities and margin lending.

Williams said that while identifying and making contact with smaller licensees could prove challenging for fund managers and others, the process of being accepted on an APL tended to be less complex.

“The profile of many of these self-licensees is that they are well-qualified and very experienced and quite capable of making decisions about the make-up of their APLs,” he said.