Should the FSC represent self-licensed businesses?

Calm down. This isn’t clickbait or an attack on the Financial Advice Association Australia. But it is a serious question about representation and advocacy in an advice sector that has changed fundamentally since 2015.

Nearly half the industry now operates under self-held AFSLs. These licensees aren’t hobbyists or cost-cutters. They are professional, accountable businesses that deliberately stepped away from conflicted institutional models in pursuit of independence, higher standards, and tighter oversight.

But with independence comes exposure. Without an institutional safety net, these firms face disproportionate risk from regulatory failure, cyber incidents, reputational fallout, and ballooning compliance costs. They are also subject to reforms like the Compensation Scheme of Last Resort, which applies the same obligations to a one-adviser practice as to a product-aligned licensee.

That’s not just unsustainable. It’s unjust.

And that is exactly why self-licensed businesses need a seat at the table when these rules are being designed.

The Financial Services Council recent green paper wasn’t perfect. It relied too heavily on small samples and anecdotal data. It romanticised institutional compliance. And it mostly avoided the cultural failures that drove advisers toward self-licensing in the first place.

But it also did something important. It acknowledged the diversity and growing influence of self-licensed firms. It recognised that compliance does not scale neatly with size. And it opened the door to structural reform that reflects different advice models, governance structures, and risk profiles.

That might sound minor. It isn’t. In policy, acknowledgment is influence. If you want to shape the rules, you need to be in the room. You don’t get to rewrite the script if you refuse to turn up.

That is why the FSC’s shift matters. It speaks the language of reform. It has the access. It sits across from Treasury. It briefs regulators. And it is in the room where licensing, CSLR and supervision settings are being drafted.

Historically, self-licensed businesses have assumed the FAAA was their natural advocate. That assumption is understandable. The FAAA is respected, adviser-led, and values-aligned. It champions ethical conduct, client-first advice, and professional uplift.

But the obstacle isn’t intent. It’s structure.

The FAAA exists to support advisers. Its mission, governance, and operating model are built around individual professionalism. It does not, and cannot, effectively represent licensees. And it is not resourced to lead structural policy debates on supervision, indemnity, governance, or regulatory design.

Let’s be honest. The FSC hasn’t always been a natural ally of independently licensed firms. Its history is institutional. Its members include product manufacturers. Many boutique licensees have viewed it as a voice for distribution, not advice.

That perception isn’t baseless. But it is outdated, and it misses the strategic moment.

The advice sector is finally moving beyond the wreckage of the Hayne royal commission. We need collective reform more than we need old rivalries. If you’re sceptical of the FSC’s motives, that’s not irrational. But disengagement is not a strategy. It just makes your absence someone else’s opportunity.

Here’s the point. Self-licensed firms already represent the best of what post-royal commission reform was meant to deliver. They have tight governance, transparent accountability, cultural integrity, and scalable compliance. The FSC says it wants to rebuild trust and increase access to advice. That cannot happen without licensees who already meet the standard.

It’s tempting to treat this as a binary choice. Join the FSC or stay sidelined. That is not the case, and it is not the argument. Viable alternatives could emerge. We could transform the FAAA to include licensees.

We could establish a new peak body for independent AFSL holders. Both are worth exploring. But right now, neither of them has the access, traction, or policy resources that the FSC already brings to the table.
This is not about choosing the perfect forum. It is about being present now, while the next regulatory framework is being designed. Waiting for a better option while decisions are being made elsewhere is not a strategy. It is abdication.

Of course, the FSC is not a perfect fit. Its foundations are product-aligned. Its legacy affiliations remain. It represents commercial interests that often diverge from those of advice-led businesses.

That tension will not go away. But it can be managed, and that starts with showing up.

Influence does not come from alignment. It comes from presence. It is built by turning up, challenging assumptions, and reshaping outcomes. Self-licensed firms do not need to conform. They need to engage, with purpose and clarity, and with a clear view of what good advice should look like.

And what happens if they don’t? If self-licensed firms remain siloed, reactive, or confined to informal alliances with no policy mandate, what are the implications?

Policy gets written without them.

That leads to regulation shaped by incumbents, reform led by scale players, and compliance models designed for institutions, not independents. This is not hypothetical. It is the current trajectory. And waiting for a better platform while the decisions are made elsewhere is how industries get regulated to, not with.

Silence is not neutrality. It’s consent.

The future of financial advice, if it is to be affordable, trusted, and accessible, depends on collaboration. No one group can fix this alone. And no one is coming to fix it for you.

That is why Assured Support joined the conversation. Not because we agree with everything in the green paper. We don’t. But we fervently believe that reform must be shaped by those who live with its consequences. Evidence matters. Accountability matters. And silence is a strategic liability.

If you’re self-licensed, this is not about the FSC’s past. It is about your future. Being part of a larger voice does not weaken your independence. It amplifies your impact.

The real question is not whether the FSC can represent you. It is whether it will. And that depends on whether you show up, speak up, and stay involved.

Because when Treasury or ASIC calls for input, it is the same voices, the same institutions, and the same priorities.

The FSC is not perfect. But it is trying. And it is changing. If you want better policy, you need better participation. If you want better representation, you need to be at the table.

If you want real influence, don’t just criticise the process. Be part of it.

Sean Graham is managing director of financial services legal and compliance firm Assured Support.