The costs of being an AFA
The Institute of Financial Advisers has done some sums and estimates the annual cost of being an authorised financial adviser is around $23,318.
Friday, August 8th 2014, 3:15PM
The total is made up of direct costs such as AML audits, AFA authorisation, FMA levies and education as well as the number of hours involved.
IFA chief executive Fred Dodds says these numbers are a guide to the costs of regulation and there are many variables which can be added into them. Also they do not include professional indemnity cover (or the cost of joining a professional association).
They are the on-going annual costs don't include the time and money spent getting qualified as an AFA, such as doing Set Standard A, B, C and D and registering on the Financial Service Providers register.
Dodds says it is little wonder the industry is not seeing a lot of new blood. He also understands why some advisers have chosen to sell their investment books and become registered financial advisers selling life insurance policies.
Likewise he can see why advisers join big groups and qualifying financial entities.
Dodds says while advisers may complain about the costs they "just have to get real and get on with it."
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