For businesses wanting to provide any kind of financial advice after March 10 this year, the Australian Securities and Investments Commission's (ASIC) message last year was unequivocal: apply for your Australian financial services licence (AFSL) by December 10 or risk not having a licence by March 11. But what has happened to the thousands of businesses that didn’t make the December deadline?

Brisbane agent Bob Pearce, whose Major Professional Services missed the December 10 deadline by about a week, is one who’s now suffering the consequences. He has been told by ASIC that his AFSL application is “low priority”.

It’s a bitter blow for the 34-year insurance veteran, who makes no excuses for missing the deadline. But he says he does wonder how the regulator determines who’s of “high priority”. “I’m not complaining – I know I missed the deadline – but I wonder how the regulator can compare someone who’s been in the industry for 34 years to someone who’s just started out.”

Mr Pearce is a multi-agent, and has now lost his contract with a major insurer that supplies a large proportion of his business. It won’t deal with him until he is licensed. Despite his frustrations, Mr Pearce says his discussions with ASIC staff have been “relatively amicable”.

“After sending an email expressing my concerns ASIC called me, which I thought was good,” he said. “I was frustrated because their email said I’d been placed at ‘low priority’ because the business hadn’t operated as a ‘financial service provider’ in the past.”

“It’s true we’ve never been licensed, but we have been in the industry for many years – the email didn’t mention the word ‘licensed’.”

To further rub salt into the wound, Mr Pearce says his son, who runs a general insurance brokerage, received his licence in only two days.

“Look, I know everyone’s been saying we’ve had two years to get our licences but conflicting information and continual adjustments by ASIC made it more difficult,” he said. “In my opinion nobody, including ASIC, knew what was going on until six months before the deadline.”  

Pauline Vamos, ASIC’s Director FSR Licensing & Business Operations, says although she “somewhat sympathises” with people in Mr Pearce’s position, the regulator has to stick to its rules and assess “streamline” applications first. “For these multi-agents it’s difficult,” she said. “Many know how to provide the advice – that’s easy – but when it comes to the paperwork it’s all new for them.”

But Ms Vamos says ASIC does take the level of experience of the business into account when assessing applications. “High levels of experience will certainly help when it comes to the practical side,” she said.

She says that well over 3000 licences have been issued so far, with the number “steadily increasing by the hour”.

Ms Vamos has some advice for those caught in a predicament like Mr Pearce’s. “If the worst comes to the worst they can always apply to become an authorised representative of another organisation,” she said. “But at the end of the day they’ve got to realise they had two years to get their act together.”