ACLs could be seen as a liability for buyers of broker businesses in future, and as a result are unlikely to add any value to a business, according to an industry expert.
Speaking at PLAN Australia's national conference last week in Darwin, Comparator Business Benchmarking managing partner Sarah Brennan said in financial planning, licences were often not desired by business buyers.
"In financial planning which has had licensing for a little bit longer, what we have seen is that acquisitions have been for businesses - not a licence," she said.
"Normally the acquirer does not want to buy a licence, and they will actually carve one out of the purchase if there is one - because bying a licence buys liability, buying a business is much better."
Brennan said the value inherent in an ACL had been a misconception during licensing among broking businesses.
Brennan added that she expected an ongoing shift towards credit representative status among brokers over time, despite the mortgage industry being "smarter" about this reality initially than financial planners.
"In the financial planning community a lot of people actually went down the licence path to start with, and then realised the cost and compliance involved in running a licence, and we saw a move back to a credit rep status."
Brennan said in the mortgage industry there was a number of misconceptions in addition to ACL value.
"I think there was a misconception was that getting a licence was easy. I think that's been dispelled for the majority through the licensing process," Brennan said.
"I think there was also not a clear understanding about the liability of having a licence, and I think in the end that becomes quite clear," she said.
Round 2, as ASIC launches surveillance
Many brokers pushed into ACLs: ALCo