The money market in Australia is so large it goes up to $23 billion annually. It shows how important it is for an organisation to be careful with its finances due to the amount involved, complying with the stringent regulations of the Australian government. Thus, they must get assistance from firms that provide financial services and products having the necessary AFSL compliance (Australian Financial Services License).
Any firm that wants to start providing financial solutions for other clients and large businesses must first understand the benefits of attaining a license that complies with the regulatory requirements as listed by the Australian government. This article will shed light on the same, allowing financial solution firm owners to comprehend and get their private license under compliance with Australian law, taking the assistance of a registered license service provider.
Benefits of attaining financial service license compliance:
- Protection and conflict resolution: There are dealer groups that provide publicity that could be seen negatively by potential clients, creating a disadvantage for everyone involved with these groups. Being compliant with AFSL allows these private firms to differentiate themselves from the dealer groups and protect their practice as these groups can have poor compliance leading to higher risk. Additionally, it helps remove any COI (Conflict of Interest) in the firm, which is commonly found amongst these dealer groups.
- Freedom of practice lawfully: Gaining compliance on the license will allow firms to explore their freedom to practise, to provide the appropriate service for their clients. They can implement custom strategies tailored as per client needs and recommend other relevant products and services without worrying about the legalities of the operation. The AFSL compliance will encapsulate all the necessary guidelines and have a framework in place, allowing them to understand and function within Australian government regulations for finance.
- Saves time and money: It is far more beneficial for a financial service firm to take the help of a registered license provider and attain their FSL (financial service license). It is more convenient to do so rather than depend on external sources to handle the framework of the business. The procurement process of the license compliance consumes less time and is more affordable than paying an external agency to hold their license. Once compliance is attained, they can have their practice anywhere they wish to expand within Australia, saving them more on their future investments.
- Helps maintain audit documentation: Maintaining compliance with AFSL will make businesses responsible for the financial services they sell to their clients. All the documentation related to the financial services and products of the business must be kept up to date, as it can impact the business. The compliance documents in possession of all ASFL holders must be read regularly to keep them current as they can have a direct reflection on the business. The internal audits will help these firms learn the process and will be prepared for any official audits from the government officers.
Improvement in revenue and profit: When finance service firms have their own private licensing and follow guidelines, they have the upper hand compared to the dealer groups. It is because the compliance process is simplified, making it easier to improve the outcomes for potential clients. That will ensure an increase in the overall revenue profit for the firm. Other firms that are a part of dealer groups must follow their directives, restricting their path to growth and customisation. It is always better to have a custom service license for business expansion.