Thursday, 29 November 2018

Almost a Financial Planner

Well, I managed to get all the assessment tasks for the Diploma of Financial Planning finished off last month. I'd left the video 'role play' tasks to the very end (after I'd completed all the written assessment tasks for all four modules), and I kept putting it off until I finally recorded the required 'client interviews' using DW and DS1 as 'the clients' and DS2 as my 'personal assistant' during the role play. In the end all four role play videos got graded as 'satisfactory' despite having very poor audio quality (using the built-in microphone on my laptop when recording from across the room didn't work as well as I'd hoped). I paid an extra $50 for 'priority marking' of the role play submissions, as marking normally takes around two weeks, and I was running out of time to finalise the DFP so I could apply to become an 'authorised representative' of an AFSL (Australian Financial Services Licence) company before the end of this year. Once the video role plays were marked I also paid an extra $50 for 'priority processing' of the certificate (so it was mailed out within three days rather than the usual 2-3 weeks).

Once I'd completed the DFP I was able to start the application process to become an 'authorised representative'. That process has so far involved filling in a set of online forms about my business (non-existent apart from having a business name registered) and my clients (none), and getting a set of background checks (police, bankruptcy, credit etc.) done. I had read that this could take 4-6 weeks to get done, but the AFSL company paid for the checks to be done and they only took two days. One nice feature was that I could submit take and submit photos of my ID, credit card etc. and didn't have to get photocopies certified by a JP. So the process was fairly quick and easy.

I also had to fill in an online form detailing my qualifications and submit copies of the certificates. I only submitted a copy of the DFP certificate and results, as I don't think my science degrees and post-grad qualifications are particularly relevant (although I listed them on the form). The AFSL can always ask for copies of those testamurs if needed. The final step was to fill in details of three business referees, so yesterday I had to ask some people at work if they would be happy to be listed as a referee. Once I had their permission I completed the online form for business references, and they were each emailed a form to complete today. Two of the three referees have already let me know that they'd sent back the completed referee forms today, so hopefully all the paperwork might be completed tomorrow.

If everything is in order I should then be notified of a date to travel to Perth to attend a two-day 'induction training' session. As the AFSL company shuts down around 20th December for the Christmas/New Year period, I have to make sure I get the induction training completed before then and the AFSL company gets my name added to the ASIC register of 'authorised representatives' before 31 December. That is a deadline, as the rules for 'new' financial planners are changing from 1 January 2019, and if I'm not a 'registered adviser' before then I would have to do one year of 'work experience' -- which isn't possible as I'm still working at my full-time job.

If everything goes according to plan I'll be able to complete my Master of Financial Planning part-time via distance education over the next two years, while also starting up my financial planning business part-time. I'm planning to do client meetings at their homes in the evenings or on the weekend - hopefully being able to meet with a financial planner outside of business hours might be attractive to somef prospective clients. We'll see how it works out in practice.

The cost of just being an 'authorised representative' is around $1000 per month (and that is through one of the cheapest AFSL companies I could find!) plus some extra costs for software licencing and a fee for having every client SoA (Statement of Advice) 'vetted' by them. Apparently financial planners in Australia usually charge between $1000 to $3000 or more for a routine SoA, so I'm thinking about charging $1200 for a SoA (and only taking on clients with fairly simple situations and needs while I'm completing my Masters). At this fee rate I would need to have about one paying client per month to just about cover the basic business running costs. I'd need about two clients per month to 'break even', as I'll be paying around $12,000 pa for my Masters courses for the next 2-1/2 years.

Fingers crossed that my AR application is approved and I get registered before the end of this year.

I finished my first course for the Masters degree this week (exam was on Tuesday), and I'll be doing four subjects next year (one per semester). Before the next semester starts in January I want to finish off a couple of additional 'specialist' add-on units that go with the DFP. One in Self-Managed Superannuation Funds, and the other in Margin Lending. They are both via distance education through the company that I did the DFP course with. I can also do the 'Advanced Diploma in Financial Planning' with them. That course costs around $1,400, so I might do it next year while doing the Masters courses (which cost $3,000 each!).

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