AMP has confirmed the early completion of financial adviser registrations ahead of the original deadline at the start of February, using the awkwardly timed and implemented obligation to highlight the benefits of being with a large, organised licensee.
The requirement was introduced on 27 November, which had been held up pending the passage of relevant legislation.
AMP group executive for advice Matt Lawler says the obligation didn’t fly under the radar nor was it miscommunicated by the regulator, but was just an awkward time of the year.
“You just naturally have people that take leave during that time,” Lawler tells Professional Planner. “The timing, whilst it was extended, we were ready for it.”
After the Financial Advice Association noted 6000 advisers were yet to fulfill the registration obligation, ASIC bumped the deadline from 1 February to 16 February.
Speaking to Professional Planner on 19 January, new ASIC commissioner Alan Kirkland said the rate of registrations was “encouraging” with another couple of thousand registrations completed that week.
The registration system was introduced in response to recommendation 2.10 of the Hayne royal commission and legislated in 2021, and is separate from the current requirement for AFSLs to appoint advisers to the ASIC Financial Adviser Register once they have been authorised.
Data available on ASIC’s website shows 2434 advisers yet to be registered, as of 25 January.
From 1 February, all financial advisers joining the AMP advice network will be registered with ASIC automatically as part of the onboarding process and receive email confirmation of their registration status.
Lawler says all AMP advisers had been registered as of at least a week ago because of the group’s persistence with its network.
“What we find is that a lot of people prioritise being an adviser and running their business, but the licensee bit is an extra bit that they don’t really understand,” Lawler says. “It requires a lot of explanation and that’s what we do.”
For larger licensees like AMP, these scenarios highlight what they believe is still a strong value proposition for advice practices, along with a regulator that even by the admission of its former commissioner, struggles to oversee a fragmented sector of around 16,000 advisers.
Lawler says they often need information and compliance from advisers, but they have the ability to communicate with them regularly and effectively.
“We might contact them 10 times to make sure that we get the job we need done from the advisers, whereas ASIC doesn’t have that sort of relationship, they just send a letter out to the licensees,” Lawler says.
“Sometimes people won’t read the letter because they’re too busy or they might read it and they don’t understand it.”
Figures from Wealth Data at the end of 2023 showed AMP had 871 licensed advisers, while data provided by AMP to Professional Planner showed the licensee had 288 aligned practices along with another 10 in its self-licensed service provider Jigsaw.
“It’s another example of these type of things is what large licensees do,” Lawler says. “They take that workload off [for] someone who is busy being an adviser and someone who’s been busy running a business.”
Lawler pointed to breach reporting as another example – ASIC’s first breach reporting summary found a lack of reports from smaller and self-licensed entities, with the same criticism repeated the following year.
“That’s not because they didn’t have breaches, it’s because they didn’t know or understand or they’re just not doing it,” Lawler says.
“Sometimes large licensees are much maligned, but this is the type of stuff that the large licensees do to support small businesses that are advisers… they haven’t got time to be prepared and constantly monitoring and understanding what they to do from a licensing obligation point of view.”
Lawler says there will be some advisers who have the capacity to do the licensing work effectively, but self-licensing is not the best option for all.
“The argument is if you become a small licensee, so you don’t have to do the work because no one’s checking up on you,” Lawler says. “That’s not a good thing.”