InterPrac Financial Planning lost another ten advisers in the week to 23 July, taking it to 94 active authorised representatives. There were 282 at the start of the year. Two-thirds of a licensee, gone in under seven months.
Everyone is covering it as a corporate story. It isn’t. It’s the same story we’ve had four times in five years, and the industry keeps refusing to name the pattern.
Dixon Advisory. United Global Capital. Shield Master Fund. First Guardian. Every one of them is a product failure wearing an advice costume. Once you see that clearly, the licensing question answers itself.
So I’ll declare my position up front. Keep your investment approach simple and evidence-based and you have removed the source of nearly all catastrophic risk in this profession. Having removed it, the main thing a traditional dealer group sells you is protection you no longer need. At that point I’d self-licence, engage an independent compliance consultant (amongst other things), and never look back.
Here’s the evidence.
92 per cent
The Compensation Scheme of Last Resort’s own initial estimate for 2025-26 records that 92 per cent of expected claims paid in that period come from two failed firms: Dixon Advisory and United Global Capital.
Two firms. Ninety-two per cent.
Dixon collapsed in 2022 over the US Masters Residential Property Fund, and accounted for $36.7 million of the $54 million the scheme had paid out by August 2025. The Federal Court found its representatives failed to act in clients’ best interests.
UGC’s model, in ASIC’s description, involved advisers establishing an SMSF and then investing a significant portion of the client’s retirement savings into Global Capital Property Fund, a related property company now in liquidation. More than $92 million went in, predominantly through SMSFs. The Federal Court called the model hopelessly conflicted. ASIC banned UGC’s director for ten years.
Then the current wave. AFCA received 2,162 complaints in 2025 relating to the Shield and First Guardian collapses, inside a 58 per cent rise in investment and advice complaints and a 59 per cent rise in SMSF complaints. Those matters, including ASIC’s proceedings against InterPrac, are before the courts and the allegations have not been determined.
AFCA has been explicit about the shape of it. Of 4,193 investment and advice complaints in 2024-25, 32 per cent concerned SMSFs — which AFCA attributed directly to business models involving the establishment of SMSFs and investment in products related to the financial firm.
Four catastrophes. One anatomy.
The anatomy
Strip the names off and they’re identical.
A client is moved out of a mainstream super fund. An SMSF is established without a good reason to exist. A large slice of the balance goes into a single illiquid product — property development, a mortgage fund, a private company — frequently related to the licensee, the director or the promoter. Nothing is priced by a real market, so nobody notices until redemptions stop.
None of that is an advice failure in the way the profession likes to discuss advice failure. It isn’t a poor risk profile conversation or a thin fact find. It’s product. The advice document is a delivery mechanism.
And notice what the regulator actually chases. Not process. Money. ASIC’s enforcement energy, AFCA’s complaint volume and every dollar in the CSLR follow the same thing: clients who lost money in something they should never have been in.
Nobody has ever been destroyed for putting a client into a diversified portfolio of mainstream funds on a mainstream platform. There’s no CSLR line item for it. The claim doesn’t exist, because a market downturn in a diversified portfolio isn’t compensable and everyone knows it.
Why I was never going to fall for it
I wrote a piece a while back about advisers who outsourced the portfolio but kept the story. The spine of it was SPIVA: most active managers fail to beat their benchmark over long periods, and the ones that win in one period don’t reliably win in the next.
If manager selection is close to a coin flip when the manager is a listed, regulated, daily-priced Australian equity fund, what exactly do you think you’re doing when you assess an unlisted property development company with no market price and a director who also owns your licensee?
That’s the connection, and it’s the most useful thing in this article. The discipline that makes you sceptical of active managers is the same discipline that makes you unsellable on exotic product. If you’ve genuinely internalised that you can’t pick winners, you are structurally immune to a twelve per cent return pitch — not because you’re more ethical, but because the pitch requires you to believe something we know isn’t true.
An adviser whose value proposition still rests on finding the good stuff is permanently exposed, because that’s the exact belief the promoters sell into. Every one of these collapses needed advisers who thought they could spot an opportunity.
Simple is not a lesser strategy. Simple is the risk control.
So what is the approved product list protecting you from?
Strip away the marketing, the conferences and the BDM relationships, and the core function of a traditional dealer group’s compliance apparatus is product risk management. The APL. Product research. Pre-vet on non-standard recommendations. Restrictions on complex products and on SMSF establishment.
All of it exists to stop advisers doing the thing that destroyed Dixon and UGC. Which is genuinely valuable — to an adviser who might otherwise do it.
If you use liquid, mainstream, diversified, transparently priced investments, hold no related-party product, and never establish an SMSF that doesn’t need to exist, you solved that problem structurally, in your investment philosophy, before any compliance officer got involved.
You’re then paying a fee, and surrendering your decisions, for protection against a risk you deliberately engineered out. At a price set by advisers who haven’t.
That’s the case against the bundled model. I’ll come back to the licensees that have worked this out, because some genuinely have.
Nobody sets the speed for their best operator
When I bought Spinners in 2023 I could have bought a franchise instead.
A franchise gives you a proven system, buying power you’d never negotiate alone, and a floor under your standards. What you hand back is decisions — the ones in the operations manual. And the manual isn’t written for your site. It’s written for the average franchisee, to protect the franchisor. So you use head office’s supplier at head office’s price, and you can’t change the menu when your own customers keep asking for the thing that isn’t on it. Then when the franchisor has a problem three states away, your site takes the damage with no hand in causing it and no vote.
At Spinners, when something isn’t working, I change it on a Tuesday. Nobody approves it. I carry every consequence and I get every decision. I took that trade deliberately and I’d take it again.
The advice version of the manual is calibrated to two things: the weakest adviser in the network, and the licensee’s own risk appetite. You are neither. Your file quality isn’t why the pre-vet threshold exists — it exists because somewhere in a network of three hundred advisers there are a handful whose files wouldn’t survive a regulator. You fund a regime priced on their risk.
That’s a cross-subsidy, structurally identical to the one I keep finding in practice P&Ls where the best clients subsidise the worst. In your own business you can see it and fix it. Inside a licensee you’re never shown the distribution.
I’m not interested in running a business at the speed of the worst operator on the ship. Not out of arrogance — because you can’t build a distinctive practice inside a framework designed to make three hundred practices indistinguishable. The framework is doing its job. Its job just isn’t your job.
InterPrac shows the sharpest version. Colonial First State, Macquarie, Netwealth, BT Panorama, AMP’s MyNorth and NEOS all stopped accepting new business from InterPrac advisers — not from particular advisers, from the licence. An adviser with a spotless file and a boring portfolio still couldn’t transact for her own clients, because of the letters at the bottom of her FSG. ifa reported, on anonymous sourcing, run-off costs of up to $45,000 for those leaving.
That’s counterparty risk, and it’s the one risk that doesn’t respond to how good you are.
“Compliance said no.” No — the law didn’t.
Most advisers can’t separate what legislation requires from what their licensee’s policy requires, because it never arrives as two things. It comes in one email, in one voice, and the voice sounds like the law. Usually it isn’t. It’s risk-averse interpretation, chosen because conservative is cheap for the licensee and expensive for you. Did I hear someone say “This Statement of Advice is a crazy document that has no focus on what the client paid me for”?
It’s also inconsistent. Ask three advisers at the same licensee what the file note standard is and you’ll get three answers. Change compliance managers and the standard moves. That isn’t legislation moving. That’s personnel moving.
I want an independent compliance consultant. Someone I engage and pay directly, who knows the legislation cold, whose reading of it holds from January to December, and who tells me what the Corporations Act says rather than what a risk committee decided in 2019 and never revisited. A consultant I engage works with me, on my process and my actual risks. A licensee’s compliance function has a different client, and it isn’t me — it’s the licence.
I’d rather pay for advice from someone whose job is to be right than get it free from someone whose job is to be safe.
Not every dealer group is the old dealer group
If you’ve read this far thinking I’m writing off the sector, I’m not. I’m writing off the bundled model. A serious service-based layer has grown up underneath it and it deserves naming.
To be clear before I name anyone: I’m not promoting, endorsing or recommending any of the firms below, and I have no relationship with any of them. I haven’t assessed their service, their pricing or their quality, and you shouldn’t read this as a shortlist. I’m citing them as public examples of a model, because an argument about structure is worth nothing if you can’t point at the structure actually operating. Do your own work on any provider before you go near them.
My Dealer Services grew the number of self-licensees it services by 20 per cent to 120 in 2025, across more than 400 adviser members. Their own explanation of the shift is this article’s argument stated by someone selling into it: advisers want to control their business without being dictated to by templates, and technology now lets smaller licensees plug in compliance, software, investment and practice management support that used to belong exclusively to the big groups.
Centrepoint Alliance runs both models at once — over 550 advisers as authorised representatives, and separately services to more than 190 self-licensed AFSLs through its Associated Advisory Practices and LaVista Licensee Solutions brands. LaVista’s menu is properly modular: advice templates, compliance frameworks, adviser audits and AFSL reviews, Responsible Manager training, a technical helpdesk — and investment research for building your own approved product list.
Read that last item again, because it resolves the argument. You can buy the product research function, the one part of the traditional offer that carries real value, without buying the operations manual bolted to it. You get the input. You keep the decision. That wasn’t available fifteen years ago and it changes the maths.
Then the compliance layer itself. Assured Support has been servicing self-licensed advice businesses for over twelve years; Holley Nethercote has done the legal end longer. This isn’t theoretical. It’s an established market.
So the honest version of my position is narrower than it might have sounded. I’m not against paying for support. I’m against paying for support I didn’t choose, priced on somebody else’s risk, delivered as a condition of being allowed to trade. Buy the framework. Buy the research. Buy the audit and the helpdesk. Buy all of it, from people you can sack if the service is poor.
Just don’t buy it bundled with your right to make decisions.
The market seems to agree. Assured Support notes 98 per cent of new advice licensees commencing in 2023 were micro-licensees with fewer than ten advisers, and the weekly Wealth Data reports now show a steady stream of one and two-adviser AFSLs. That’s not a fad. That’s an unbundling.
Where I’ll argue against myself
Simple investing doesn’t make you claim-proof. It removes the catastrophic tail, not the ordinary one. You can still be liable for an SMSF that shouldn’t exist, insurance that wasn’t in place, a drawdown strategy that failed, service that didn’t match the fee. Boring portfolios fix the thing that closes licensees, not everything else.
Self-licensing isn’t for everyone, and its advocates undersell the cost. ASIC’s FY26 statement sets the levy at $1,500 minimum plus $3,037 per adviser, a 27 per cent rise. CSLR’s FY27 estimate has advice contributing $190.3 million of a $198.1 million total, with the FAAA warning combined levies could exceed $5,000 per adviser. Then retail-priced PI, the audit, the responsible manager who is probably you, breach reporting. Assured Support — advocates of self-licensing, not opponents — put it bluntly: some practices can’t comply, some won’t, and others simply don’t bother. Your framework is only as good as your own judgment, with nobody above you to catch the drift. Fine in year one. Year four, when you’re busy, is the test.
And it doesn’t exempt you from other people’s failures. The CSLR’s FY27 estimate explicitly includes the first tranche of Shield and First Guardian claims. The immaculate self-licensed adviser in Perth who never touched either fund pays for them anyway, compulsorily. Self-licensing buys control of your decisions. It does not buy immunity from what other people do.
The decision almost nobody made
Many advisers didn’t select a licensee against criteria. They landed there. Inherited it, followed a principal, took the deal in front of them, chose on fee or a platform relationship. Then never revisited it in a decade.
Same pattern I see with practice owners and their eventual buyer — decided by default, through a hundred small choices nobody treated as a decision, until the market makes it for you. Around 188 advisers found that out this year, on somebody else’s timetable.
So here’s the sequence. Fix the investment approach first: it’s the largest single risk in your business and the one entirely within your control. Then ask what your licensee is protecting you from, now you’ve removed the thing it was built to protect you from. Then price what’s left line by line, not as a bundle, against what you could buy from a provider you choose. Then ask what the difference costs you in decisions, not dollars.
I know where I land. That doesn’t mean you should — it means you should get there on purpose.
The genuinely wrong answer is the one you arrived at by never deciding. That one costs the most, and you find out the price at the worst possible moment.
This article refers to civil penalty proceedings and court applications commenced by ASIC in relation to InterPrac, and to the Shield and First Guardian Master Funds. Those matters are before the courts and the allegations have not been determined. Sequoia Financial Group has publicly rejected ASIC’s stated concerns regarding the proposed sale of InterPrac. The findings referred to in relation to Dixon Advisory and United Global Capital are matters of determined record. Nothing here should be read as a finding or an allegation against any individual adviser. Service providers are named as examples of an operating model only. The Pilgrim Advisory has no commercial relationship with any of them and receives no referral fee, commission or other benefit from any provider named in this article or elsewhere on this site.