Vincent Holland (left), Jaime Johns and Recep Peker

Self-licensing has opened the door for advice practices to take complete control over their operations, but that responsibility requires careful due diligence into tech vendors.

Because of the long-term implications, Plutosoft co-founder Vincent Holland said it was invaluable to ask hard questions over what security certifications the product provider holds and what their track record is in the Australian market.

“The key is to do thorough due diligence and know what you’re getting into,” Holland tells Professional Planner.

“Technology is a key part of running your business. Make sure it’s well planned and look at different solutions. We would always recommend running a trial of a system, because at the end of the day it’s a big decision.”

Holland says more licensees are moving into open software approved product lists rather than mandating pieces of software to “hook into”.

“It’s just broadly a recognition that advisers across the board have more choice than they’ve ever had – that’s products, licensing or self-licensing, software,” Holland says.

“There’s a lot more choice in the market now than there’s ever been, because the big banks left the sector.”

However, Holland adds that software is one of the key factors in deciding whether to change from being with a licensee or going self-licensed because it becomes a dominant influence on everything from profitability to client experience.

“The [issue] for a self-licenced adviser is they’re now moving to their own structures and so they’re removed from the dealer group structure they once would have had,” Holland says.

Keeping the slate clean

SuitabilityHub founder and managing director Recep Peker says moving to self-licensing is “one of the most transformational moments” in an adviser’s career.

“They essentially have a clean slate and they can build the technology stack they believe is best in class for their client value proposition,” Peker says.

“Before considering their tech stacks, advisers should really consider their value proposition to clients. We see too many advisers trying to be all things to all people.”

Peker says the due diligence process is different depending on which tech sector is being assessed.