If there’s an upside to the public hearings of the Royal Commission into Misconduct in Banking, Superannuation and Financial Advice, then Futuro Financial Services managing director Paul Kelly says it is that financial planners may rethink how they choose a new licensee.

Kelly says that smaller licensees were routinely outbid by institutionally owned or affiliated licensees to attract new advice practices. But now, he says, there’s greater scrutiny of a licensee’s value proposition, and less of an emphasis on how much the licensee is willing to pay to lock the adviser in.

“For once it’s become a bit more of a level playing field – what is the licensee actually offering, what can it actually do to help that advisory business moving forward?” he says.

“Whilst that was always talked about, and whilst it was always important, in the end it sometimes used to be that chequebooks ruled.”

Kelly says that an effect of the Future of Financial Advice (FoFA) law changes was to drive advisers into “the perceived safety of the big boys”.

“But I think today people look at that and they go, there’s some structural problems that eventuated there. It’s become more of a level playing field between the big end of town and the boutiques like ourselves”.

But it’s a two-way street, Kelly says, and while advisers may think about more than just the money, advisers themselves should expect to be more closely examined by licensees. In the wake of the collapse of the Dover Financial Advisers licence, the Australian Securities and Investments Commission (ASIC) urged licensees to think carefully before taking on advisers from licensees with poor compliance track records.

Kelly says poor compliance speaks to poor culture, either within an advice practice or within a licensee. He says Futuro has found an approach to team-building and relationship -developing that has had “a beneficial outcome from a compliance perspective”.

“If you bring people together frequently, bring teams together, it’s one of the things about how teams work,” he says.

“They have got to turn up and look each other in the eye almost every time they meet in a way that actually says I am part of this group, I want this group to succeed, because I want to succeed as well, and I’ve got to be doing the right things to make that happen.”

Kelly says it’s a form of peer-group pressure that drives the collective to behave appropriately. Some might even describe it as professionalism – a commitment by the collective to strive for high standards and codes of behaviour. Whatever drives it, that mentality is “the key to having a group that does try and do the right thing by each other, which means their businesses are run in a compliant fashion at the end of the day – it’s powerful”, Kelly says.

Futuro and its sister licensee Insight Investment Services had about 80 authorised representatives at the end of May, and Kelly says its advisers can come together formally as often as seven times a year, in capital-city meetings knowns as advice network meetings (ANM).

A senior member of the management team attends each ANM and they are run separately from Futuro’s annual conference and annual forum for business owners in the network. The ANM agenda encourages advisers to discuss their own businesses, their wins and any issues that are causing concern; and they hear about the same issues from other advisers.

“We talk about compliance and we talk about where the industry is up to – there’s a fair bit goes on and it’s an interactive process,” Kelly says.

“It’s very open, and they’re usually a very good meeting.”

Kelly says the meetings are also used to run an eye over potential recruits to the Futuro licence before anything is formalised.

“That tells us a fair bit. It’s no use bringing them into that meeting or bringing them into the licence if they’re not going to be well-received by the group,” he says.

“And it’s one of the things we’re very upfront about when we talk to people when we’re recruiting. This is the way we work.

“If you’re a loner there’s probably nothing wrong with being a loner, but you probably don’t fit us. We’ve got to tick that cultural box before we do anything.”