As a respected elder in a mid-sized firm, my considerable expertise has been sequestered in discussions regarding a licensee defection.

The consensus is that our current licensee is not providing an adequate service for the amount of money they charge. If I’m to throw my two cents in, I’ll add that the Christmas muffins they sent in December were dry and the company insignia on the icing somehow made them taste worse.

In truth, I think the rift began on a personal level. Our head of compliance and the licensee’s responsible entity saw eye to nose a few template issues and a protracted stoush ensued. The RE eventually made the fatal mistake of pulling rank, which only got our compliance manager more rankled. Hell most likely hath no fury like a Chinese regulation expert – Mrs Woo – that has five kids and an advice document axe to grind.

Becoming self-licensed wasn’t an option for us. We barely have the wherewithal to organise a Christmas party.

The boss limited our potential suitors down to three.

There was the fancy new mob, which invited us to become shareholders in the licensing company and “control our own destiny”, as it were. A meeting was arranged at their office. The coffee machine was superb, but I found it difficult to handle a beverage while sitting on a beanbag and spilt my cappuccino on my chinos. The team was young and tech savvy – the ying to our yang – and it looked like the boss was keen, right up until they said we’d have to go fee-for-service on our client book to align with their cultural values. We rolled off our beanbags and out the door.

The second licensee was more of a traditional dealer group. They offered a classic mix of services with the kind of compliance oversight advice firms we were used to, which is to say less than ASIC would like. The office couches were a bit threadbare and the coffee machine was a kettle. They were charging about 40 per cent less than the woke mob with the beanbags but, in truth, only looked about 60 per cent as good. We could charge clients however we wanted, though, and there wasn’t a young person in sight. I liked them, but Mrs Woo said she spotted 14 breaches of the Corps Act in reception alone. She exercised her veto rights and we were on our way.

The third was a proper institutional licensee, one of the big bank aligned dealer groups that used to dominate the landscape. They seemed genuinely surprised we were interested. One look at their APL and we weren’t.

Another meeting was called. The boss was leaning towards the fancy new mob, having been convinced by the founder of our venerable firm that going fee-for service was inevitable anyway. Regardless, he wanted our opinion. Our CIO said he liked the traditional dealer group because they were cheap and uncomplicated. I was in the same camp. Mrs Woo was not.

It’s been 2 months since we transferred out allegiance to the fancy new mob, and things have certainly changed around here. We’ve lost ten per cent of our clients on the way to becoming fee-for-service, but they were the ones we didn’t like anyway. We’ve also got two beanbags in our lunchroom. Sometimes the office manager puts the shopping bags on them while she unloads the milk and bread.

Mrs Woo, for her part, has a new nemesis on the compliance front – an AI program that uses native language generation to find breaches in our advice documentation. It’s so effective we’ve managed to fire two paraplanners. I’ve never seen her so happy.

Dixon Bainbridge may be contacted by email only since his phone was disconnected - and it's best to try in the mornings. The views expressed in this column are not necessarily those of Professional Planner, and not even necessarily grounded in reality, to be frank.
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