Insurance Gameplan Summary
Insurance advisory business bolted onto Annys Jewellers. Every month, 5-10 customers buy jewellery and ask "where should I insure this?" Right now we send them to a third party and earn $30 per referral. They then pay $275/year in premiums — forever — and we see none of it. Annys Protect captures that value by placing the insurance ourselves, cross-selling car/home/contents, and insuring other jewellers' businesses. Commission-only arrangement — 50/50 split with our licence partner, no monthly fees, zero downside risk.
What We Need to Get Started — Two Courses
Before we can legally give insurance advice and place policies, we need to complete two qualifications bundled into one course. It can be done online, part-time, alongside the jewellery business.
Certificate IV in General Insurance + RG146 Tier 1
FNS41422 — The industry-standard qualification for general insurance, bundled with the ASIC-mandated RG146 Tier 1 training that legally allows us to give personal insurance advice.
Certificate IV covers: Insurance products and services, claims processing, risk assessment, client relationships, compliance, and underwriting fundamentals.
RG146 Tier 1 covers: The ASIC-mandated competency standard for giving personal financial product advice on general insurance. This is the legal gate — without it, no AFSL holder can appoint us as an AR. With it, we can advise on and place any general insurance product: jewellery, car, home, contents, business, cyber, and more.
How the Business Actually Works
We operate as an Authorised Representative (AR) under an existing Australian Financial Services Licence (AFSL). Think of it like a franchise — we run our own insurance practice under someone else's licence. They provide the legal authority, compliance framework, and insurer access. We bring the customers and do the advising.
Why not get our own licence? An own AFSL costs $40,000–$80,000 to set up and $20,000–$50,000/year to maintain (PI insurance, compliance staff, ASIC levies, audits). At our starting volume, that would lose money for years. The AR model lets us start for under $9,000 and only pay when we earn — through a commission split.
The customer experience: A customer buys a $10,000 engagement ring. At the counter, we say: "The last thing we do before you take this home is make sure it's covered." We quote and place the policy on the spot. The customer walks out with their ring insured. If it's ever stolen or damaged, they call us — we manage the claim and remake the piece in our workshop. Every year, the policy renews and we earn commission again. And we ask: "While we're at it — are you overpaying on your car and home insurance?"
How the Commission Split Works
When we place a policy, the insurer pays a commission (built into the premium — the customer doesn't pay extra). The premium rate depends on the value of the piece. Higher-value items attract a higher premium rate because they carry more risk.
Premium rates:
- $5,000 ring — premium rate ~2.2% = $110/year premium
- $20,000+ ring — premium rate ~3.5% = $700/year premium
The commission rate and the AR split both have a range — starting conservative and improving as we grow. Here are the worst and best case scenarios side by side:
Worst Case: $5,000 Ring, 15% Commission, 50/50 AR Split (Years 1-2)
Best Case: $20,000 Ring, 20% Commission, 75/25 AR Split (Year 3+)
That's a 12.7x difference — $8.25 per policy in the worst case vs $105 in the best case. The real number will sit somewhere in between, depending on the piece value, the commission rate we negotiate, and whether we've hit the renegotiation trigger on the AR split.
The AFSL holder starts at 50% because we're unproven. Once we hit $20k in gross commission (or reach year 3), we renegotiate to 75/25 — this is standard in the industry for ARs who demonstrate volume and clean compliance. The commission is built into the premium — the customer pays nothing extra. It repeats every year when the policy renews.
The key insight: Jewellery commission alone is modest ($8–$105/policy). This is exactly why cross-selling car, home, and contents insurance (where commissions are $102–$306 per policy) is essential to making this a real business.
Three Revenue Streams
+ $2,000 claim remake profit
(car, home, contents)
(insuring other jewellers' shops, stock, liability)
Worst Case — Full Workings (Year 1)
Before showing all four scenarios, here's exactly how the worst case year 1 number is calculated — line by line, nothing hidden.
Assumptions:
- 5 jewellery policies per month = 60 policies in year 1
- Average piece value: $10,000 at ~2.75% premium rate = $275/year premium
- Commission rate: 15% of premium
- AR split: 50/50 (AFSL holder takes half)
- Cross-sell: only 30% of clients agree, take only 1 general policy ($1,200/yr premium, 17% commission)
- SME business clients: 0 (we don't even try in worst case)
- Claims: 1 per year (conservative — industry average is 5% of book but worst case assumes fewer)
- Claim remake profit: $2,000
- Operating costs: $600/year (CPD training only — all infrastructure shared with jewellery business)
| Line Item | Calculation | Amount |
|---|---|---|
| Facet A — Jewellery Insurance | ||
| Jewellery gross commission | 60 policies x $275 premium x 15% | $2,475 |
| Our share after 50/50 AR split | $2,475 x 50% | $1,238 |
| Claim remake profit | 1 claim x $2,000 profit | $2,000 |
| Facet B — Cross-Sell General Insurance | ||
| Clients who agree to review | 60 jewellery clients x 30% | 18 clients |
| General insurance gross commission | 18 policies x $1,200 premium x 17% | $3,672 |
| Our share after 50/50 AR split | $3,672 x 50% | $1,836 |
| Costs | ||
| Operating costs (CPD training) | Annual | -$600 |
| Year 1 Net Profit | $1,238 + $2,000 + $1,836 - $600 | $4,474 |
| Without claim profit | $1,238 + $1,836 - $600 | $2,474 |
Key point: Year 1 commission alone (without claims) earns $2,474. That's modest — but it's essentially free money on top of conversations we're already having. And every policy renews, so year 2 has 60 existing policies renewing PLUS 60 new ones being added.
Four Scenarios — 5 Year Projections (Core Business: A + B + E)
All scenarios use industry-verified commission rates. Claims: 1/year worst case, scaling with book size. "Referred" means other jewellers send their customers to us (we pay them half our commission). SME = insuring other jewellers' businesses (shop, stock, tools, liability).
What these profit figures represent: All figures below are our total profit after the AR broker has taken their cut (50% in years 1-2, 25% from year 3). This is the money that lands in the Annys Protect business — before any split between partners. Claims remake profit and operating costs are also factored in. These are the net numbers the business keeps.
AR Split Renegotiation Built In
Years 1-2: 50/50 split (AFSL holder keeps 50% of commission) — while we prove ourselves.
Year 3+ (or when $20k gross commission reached): Renegotiate to 75/25 split — we keep 75%, AFSL holder keeps 25%.
This is standard in the industry. Once an AR proves volume and clean compliance, the split improves. At $20k+ gross commission, we are a profitable AR for them — we have leverage to renegotiate.
Best Case Uses 20% Commission Rate
Worst/decent/medium scenarios use 15% jewellery commission (conservative). The best case scenario assumes we negotiate a higher commission rate of 20% — achievable with volume and specialist positioning. General insurance rates stay the same across all scenarios (17% home, 15% motor, 20% business).
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Jewellery commission rate | 15% | 15% | 15% | 20% |
| Jewellery policies/month | 5 | 5 | 7 + 3 referred | 10 + 5 referred |
| Cross-sell rate | 30%, 1 policy | 40%, 1.5 policies | 50%, 2 policies | 50%, 3 policies |
| SME business clients/year | 0 | 2 | 5 | 8 |
| Claims/year (at $2k profit each) | 1 | 2 | 3 | 5 |
| AR split | 50/50 years 1-2, then 75/25 from year 3 | |||
| Year 1 (50/50) | $4,474 | $8,100 | $17,600 | $38,000 |
| Year 2 (50/50) | $8,500 | $16,200 | $37,200 | $80,000 |
| Year 3 (75/25) | $16,300 | $30,800 | $75,500 | $140,000 |
| Year 4 (75/25) | $19,800 | $39,500 | $99,000 | $178,000 |
| Year 5 (75/25) | $23,000 | $47,500 | $120,000 | $212,000 |
| 5-Year Total | $72,074 | $142,100 | $349,300 | $648,000 |
| Monthly by Year 5 | $1,917 | $3,958 | $10,000 | $17,667 |
Notice the jump from year 2 to year 3 — that's the renegotiation kicking in. Going from keeping 50% to keeping 75% of commission increases our take by 50% overnight.
Facet C — Referrals from Other Jewellers (Book Builder)
This is a book-building strategy, not a direct profit play on jewellery commission. We partner with other jewellers and give them 100% of our jewellery commission as a referral incentive. We make $0 on the jewellery policy itself.
Why Give Away the Commission?
The jewellery commission is small ($8–$20 per policy after AR split). Giving it to the referring jeweller makes their incentive better than Centrestone (who pays ~$30 per referral). The jeweller gets ongoing commission every year the policy renews — not a one-off referral fee. That's a compelling pitch.
Where we earn: Every referred jewellery client is a cross-sell lead. We earn full commission (no referral fee) on their car, home, and contents insurance. Plus we earn claim fulfilment profit ($2k) if their piece needs remaking in our workshop. The jewellery policy is the hook — cross-sell and claims are the revenue.
How it works per referred client:
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Referring jewellers in network | 2 | 3 | 5 | 8 |
| Referred clients/month | 2 | 4 | 7 | 12 |
| Jewellery commission to us | $0 — all given to referring jeweller | |||
| Cross-sell rate on referrals | 20%, 1 policy | 30%, 1 policy | 40%, 1.5 policies | 40%, 2 policies |
| AR split | 50/50 years 1-2, then 75/25 from year 3 | |||
| Year 1 (cross-sell + claims only) | $800 | $2,400 | $6,300 | $14,400 |
| Year 2 | $2,000 | $5,400 | $14,400 | $32,000 |
| Year 3 (75/25 kicks in) | $3,600 | $9,600 | $24,000 | $52,000 |
| Year 4 | $4,800 | $12,600 | $32,000 | $68,000 |
| Year 5 | $5,800 | $15,400 | $39,000 | $82,000 |
| 5-Year Profit Total | $17,000 | $45,400 | $115,700 | $248,400 |
| But the real win is book value — every policy we place sits on OUR book as a sellable asset (2x multiple) | ||||
| New policies added to book/year (jewellery + cross-sell) | 29 | 62 | 130 | 245 |
| Cumulative policies on book by year 5 | 120 | 260 | 540 | 1,020 |
| Year 5 recurring commission from these policies | $5,800 | $15,400 | $39,000 | $82,000 |
| Book value added (2x multiple) | $11,600 | $30,800 | $78,000 | $164,000 |
Why This Matters More Than the Profit
Facet C profit looks modest — $17k–$248k over 5 years. But the book value it creates is the real play. Every referred client adds policies to our book that renew year after year. When we eventually sell the book (or value it for own-AFSL transition), those policies are worth 2x their annual recurring commission.
In the best case, Facet C adds 1,020 policies and $164,000 in book value by year 5 — built from customers we acquired for free (the referring jeweller did the selling, we just placed the policy).
Think of it this way: We give away $8–$20 per year in jewellery commission to the referring jeweller. In return, we get a customer who adds $300+ to our book value (at 2x multiple) and generates $150+/year in cross-sell commission. That's a 15:1 return on the commission we gave away.
The pitch to other jewellers: "You currently send customers to Centrestone for a one-off $30 referral. With us, you keep the full ongoing commission — $8–$20 every year the policy renews, for as long as the customer stays. You do nothing except hand them our card."
Facet D — Comparison Website (Additional Revenue)
A website where anyone can compare insurance — not just jewellery customers. This is the digital scale play, designed to acquire customers beyond the jewellery pipeline entirely. Think of it as our version of Finder or iSelect, but with a key difference: we can escalate users to personal advice (which comparison sites legally cannot do).
Two revenue tiers:
User enters generic details, sees comparison, clicks through to insurer via affiliate link.
User wants help. Uploads policies, we review and place as broker. Covered by our AR.
Why we wait until year 2–3: Building the website costs time and money. We need a proven process (from Facets A and B) before digitising it. We also need the AR arrangement operational first so we can legally offer Tier 2 personal advice. Year 1 is building; revenue starts in year 2.
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Website visitors/month (by year 3) | 200 | 500 | 1,500 | 5,000 |
| Tier 1 conversions/month | 1 | 3 | 8 | 20 |
| Tier 2 clients/month | 0 | 1 | 3 | 8 |
| Acquisition method | SEO only | SEO + social | SEO + social + small ads | SEO + social + ads |
| Year 1 profit | $0 | $0 | $0 | $0 |
| Year 2 profit | $600 | $3,600 | $12,000 | $30,000 |
| Year 3 profit | $1,800 | $8,400 | $32,000 | $84,000 |
| Year 4 profit | $3,000 | $14,000 | $52,000 | $140,000 |
| Year 5 profit | $4,200 | $20,000 | $72,000 | $200,000 |
| 5-Year Total | $9,600 | $46,000 | $168,000 | $454,000 |
Note: Facet D is the highest-risk, highest-reward path. Worst case it generates pocket money. Best case it becomes the dominant revenue stream and a standalone business. The key variable is traffic — which depends on SEO content, social media consistency, and marketing spend. We don't need Facet D to make the business work. It's pure upside.
Facet E — SME Business Insurance: The Big Opportunity
This facet has the potential to become the largest revenue stream in the entire business. While jewellery insurance and personal lines cross-sell are built on retail customers, SME business insurance taps into a completely different market — professional services firms and small businesses who need comprehensive commercial cover.
We have a unique advantage here: a partner with law, accounting, and private equity experience who speaks the language of these clients. When an accountant or lawyer hears insurance advice from someone who understands their profession, their compliance obligations, and their risk profile — that's a fundamentally different conversation than what Gallagher offers with a generic form and a $500 broker fee.
Target Industries
We ARE jewellers. Nobody understands the risks better — stock theft, workshop fire, casting accidents, customer claims on repairs.
| Public liability | $500–$1,500 |
| Business property + stock | $2,000–$6,000 |
| Glass / shopfront | $300–$800 |
| Business interruption | $500–$1,500 |
| Workers comp | $500–$2,000 |
| Cyber | $500–$1,500 |
| Typical package | $4,300–$13,300 |
Pipeline: Facet C jeweller relationships feed directly into E.
Our partner's background makes this a natural fit. Every accounting firm needs PI, cyber, and management liability. Most are underinsured.
| Professional indemnity | $2,000–$8,000 |
| Public liability | $500–$1,500 |
| Cyber insurance | $1,500–$5,000 |
| Management liability / D&O | $1,500–$4,000 |
| Business property | $800–$2,000 |
| Typical package | $6,300–$20,500 |
Pipeline: Partner's existing professional network.
Highly regulated industry with mandatory PI requirements. They understand insurance — but most don't shop around for their own. Our partner speaks their language.
| Professional indemnity | $3,000–$15,000 |
| Cyber insurance | $2,000–$6,000 |
| Management liability / D&O | $2,000–$5,000 |
| Public liability | $500–$1,500 |
| Typical package | $7,500–$27,500 |
Pipeline: Partner's PE and financial services network.
Every law firm needs PI — it's mandatory. But many small/mid firms overpay through legacy brokers like Gallagher. Our partner's legal background gives instant credibility.
| Professional indemnity | $5,000–$25,000 |
| Cyber insurance | $2,000–$8,000 |
| Management liability / D&O | $2,000–$6,000 |
| Public liability | $500–$2,000 |
| Employment practices | $1,000–$3,000 |
| Typical package | $10,500–$44,000 |
Pipeline: Partner's legal network + PE connections.
What We Earn Per Business Client
Business insurance commission rates are higher than personal lines — typically 15–25% depending on the product. Using a conservative 20% average:
| Client Type | Typical Package | Gross Commission (20%) | Our Share (75/25 from Y3) |
|---|---|---|---|
| Jeweller | $4,300–$13,300 | $860–$2,660 | $645–$1,995 |
| Accountant / Bookkeeper | $6,300–$20,500 | $1,260–$4,100 | $945–$3,075 |
| Financial Planner | $7,500–$27,500 | $1,500–$5,500 | $1,125–$4,125 |
| Law Firm | $10,500–$44,000 | $2,100–$8,800 | $1,575–$6,600 |
One mid-size law firm ($25k package) generates $3,750/year in recurring commission to us. That's more than 40 jewellery policies combined. And it renews every year.
Facet E — 5 Year Projections
Facet E is modelled separately because it's driven by the partner's network rather than jewellery foot traffic. This is additional revenue on top of A+B. Uses 75/25 AR split from year 3.
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Jewellers/year | 2 | 3 | 5 | 8 |
| Accountants & bookkeepers/year | 0 | 2 | 5 | 10 |
| Financial planners/year | 0 | 1 | 3 | 6 |
| Law firms/year | 0 | 0 | 2 | 4 |
| Total new SME clients/year | 2 | 6 | 15 | 28 |
| Avg package premium | $5,000 | $7,500 | $12,000 | $18,000 |
| AR split | 50/50 years 1-2, then 75/25 from year 3 | |||
| Year 1 (50/50, jewellers only) | $1,000 | $4,500 | $12,000 | $25,200 |
| Year 2 (50/50, expanding) | $2,800 | $11,000 | $33,600 | $75,600 |
| Year 3 (75/25, all industries) | $6,000 | $22,500 | $72,000 | $163,800 |
| Year 4 (75/25) | $8,700 | $33,000 | $108,000 | $252,000 |
| Year 5 (75/25) | $11,200 | $43,500 | $144,000 | $340,000 |
| 5-Year Total (Facet E only) | $29,700 | $114,500 | $369,600 | $856,600 |
Why the best case is so large: A single law firm at $25k premium generates $3,750/year in commission (at 75/25 split). Get 15 law firms on the book by year 5 and that's $56,000/year from one client type alone. Accountants and financial planners add similar numbers. The compounding effect of recurring commissions across high-value professional services clients is what makes Facet E potentially the biggest revenue stream in the business.
The Cross-Referral Loop
Accountants, financial planners, and lawyers all serve overlapping clients. Insure one accountant's business and they refer their SME clients to you for business insurance. Insure a financial planner and they refer their clients for personal lines (Facet B). Insure a law firm and their partners become personal jewellery insurance clients (Facet A). Every SME client becomes a referral source for every other facet.
All Five Facets Combined — Total Potential
Adding all facets together. A+B is the foundation. C, D, and E are growth layers — each independent, each optional, each additive.
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| A+B (jewellery + cross-sell) | $42,374 | $72,100 | $179,700 | $348,000 |
| + C (jeweller referrals — book builder) | $17,000 | $45,400 | $115,700 | $248,400 |
| + D (comparison website) | $9,600 | $46,000 | $168,000 | $454,000 |
| + E (SME business insurance) | $29,700 | $114,500 | $369,600 | $856,600 |
| 5-Year Grand Total | $98,674 | $278,000 | $833,000 | $1,907,000 |
| Year 5 annual profit (all facets) | $37,200 | $103,900 | $295,000 | $674,000 |
Facet E is the game-changer. The jewellery business (A+B) is the foundation. Referrals (C) and the website (D) add scale. But SME business insurance (E) — targeting accountants, lawyers, financial planners, and jewellers — is where the partner's background turns this from a side business into a serious brokerage. In the best case, Facet E alone generates more than all other facets combined.
What the AFSL Holder Pays For (Why They Take 50%)
The AFSL holder takes 50% of commission because they carry significant costs and legal risk to enable us to operate:
| Their Cost (Per AR, Per Year) | Estimated Amount |
|---|---|
| Professional Indemnity Insurance — covers us if we give bad advice or a client complains | $2,000–$5,000 |
| Compliance & Supervision — reviewing our file notes, annual audits, ASIC reporting | $2,000–$4,000 |
| ASIC Levy — annual regulatory levy allocated per AR | $1,500–$3,200 |
| Technology & Platforms — quoting systems, broking software, CRM | $1,000–$3,000 |
| Onboarding — background checks, ASIC registration, training (one-off) | $500–$2,000 |
| Total cost to them per AR | $3,000–$6,000/year (marginal cost) |
They also carry the legal liability — if ASIC investigates, the AFSL holder is on the hook first, not us. Their 50% covers this risk. At our projected volumes, their 50% cut pays for their costs and gives them profit — which is why they say yes.
The Five Growth Paths
The projections above only model paths A, B, and E. There are five total growth avenues — each one feeds the next. We launch them sequentially, validating each before moving to the next.
| Path | What | When | How It Works |
|---|---|---|---|
| A | Jewellery Insurance Our own customers |
Month 3 | Customer buys a ring, we insure it at point of sale. Earn commission + claim remake profit in our workshop. This is the anchor — we already have 5–10 enquiries per month. |
| B | Cross-Sell General Insurance Same customers |
Month 5 | "Are you overpaying on car and home?" We review their existing policies using AI analysis, then call with better options. This is where the real money starts — 6x the commission of jewellery alone. |
| C | Referrals from Other Jewellers Volume play |
Month 9 | Other jewellers send their customers to us for insurance. They earn a referral fee (half our commission). We do the placement, compliance, and renewals. Turns competitors into our sales force. |
| D | Comparison Website Digital scale |
Year 2–3 | A website where anyone can compare insurance — like iSelect but with the ability to escalate to personal advice (which iSelect can't do). Acquires customers beyond the jewellery pipeline. Long-term play. |
| E | SME Business Insurance Niche specialty |
Year 2 | Insure other jewellers' businesses — their shop, stock, tools, public liability, workers comp. We understand the risks because we ARE jewellers. No other broker can say that. Higher premiums = higher commissions. |
The funnel:
A (jewellery insurance) → feeds B (cross-sell to same clients)
B (cross-sell) → builds confidence for C (referral network)
C (referral network) → builds jeweller relationships for E (SME insurance)
All of the above → builds volume and track record for D (comparison website)
Important: The financial projections in this document only model A, B, and E. Paths C and D represent additional upside not included in the numbers — C alone could add $15,000–$30,000/year by year 3, and D is the long-term scalability play.
What Drives Each Scenario
Worst case assumes we only convert 30% of jewellery customers into one additional insurance policy (e.g., their home insurance), we don't pursue any SME business insurance at all, and we have no referrals from other jewellers. This is the "do the bare minimum" scenario — and it still makes $36,500/year by year 5.
Decent case adds a slightly better cross-sell rate (40%) and we start insuring 2 other jewellers' businesses per year. Still very conservative — no referral network, no marketing.
Medium case is where cross-sell works well (50% of jewellery customers say yes to a review and take 2 general policies each), we build relationships with 3 other jewellers who refer their customers to us, and we insure 5 jewellery businesses per year. This requires effort but is realistic by year 2.
Best case assumes strong volume (10 own + 5 referred jewellery policies per month), high cross-sell (50% take 3 policies each), and 8 SME business clients per year. This is the "go all in" scenario and would likely require a part-time admin by year 3.
Key point: Every scenario is profitable from year one. The difference is how much effort we put in. The worst case requires ~10 hours/month. The best case requires ~30 hours/month. All scenarios compound — the book grows every year because 85–90% of policies renew automatically.
Book Value — The Sellable Asset
The "book" is every policy and renewal on our books. Unlike most businesses where revenue stops when you stop working, an insurance book generates income passively through renewals. 85–90% of customers renew their policies every year without us doing anything — the commission just keeps flowing.
This makes the book a sellable asset. Insurance books in Australia trade at 2–3x annual recurring commission. A buyer pays that multiple because they know the renewals will keep coming. It's like buying a rental property — you pay upfront for the ongoing income stream.
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Year 3 book value (at 75/25) | $24,000–$36,000 | $42,000–$63,000 | $97,000–$146,000 | $190,000–$285,000 |
| Year 5 book value (at 75/25) | $38,000–$57,000 | $68,000–$102,000 | $168,000–$252,000 | $310,000–$465,000 |
The Bottom Line
Year 5+ Option: Get Our Own AFSL
At year 5, we face a decision. We're paying the AFSL holder 25% of all commission (after the year 3 renegotiation). As the book grows, that 25% becomes a large number. At some point, it's cheaper to hold our own licence and keep 100%.
What an Own AFSL Costs
| Cost | One-Off Setup | Ongoing Per Year |
|---|---|---|
| ASIC application fee | $1,500–$7,500 | — |
| Legal / professional support for application | $10,000–$25,000 | — |
| Professional Indemnity insurance | — | $12,000–$20,000 |
| ASIC annual levy | — | $3,000–$5,000 |
| Compliance / audit | — | $10,000–$20,000 |
| AFCA membership (dispute resolution) | — | $1,500–$5,000 |
| Total | $11,500–$32,500 | $26,500–$50,000/year |
When Does Own AFSL Make Sense?
The breakeven is simple: does the 25% we stop paying the AFSL holder exceed the cost of running our own licence?
| Worst | Decent | Medium | Best | |
|---|---|---|---|---|
| Year 5 gross commission (all facets) | $49,600 | $138,500 | $393,000 | $899,000 |
| Currently paying AFSL holder (25%) | $12,400 | $34,600 | $98,300 | $224,800 |
| Own AFSL annual cost | ~$35,000 | ~$35,000 | ~$40,000 | ~$45,000 |
| Annual saving with own AFSL | -$22,600 | -$400 | +$58,300 | +$179,800 |
The Verdict
- Worst case: Don't bother. Own AFSL costs more than the AR split. Stay as AR.
- Decent case: Breakeven. Could go either way — stay as AR unless there are other reasons to switch.
- Medium case: Own AFSL saves $58,300/year. Setup cost pays for itself in 6 months. Do it.
- Best case: Own AFSL saves $179,800/year. You're giving away a house deposit every year by staying as AR. Absolutely do it.
Year 5–7 Projections With Own AFSL (Medium + Best Case)
Assuming we get our own AFSL at the start of year 6. We keep 100% of commission minus the AFSL running costs instead of paying 25% to the AR holder.
| Medium (Own AFSL) | Medium (Stay AR) | Best (Own AFSL) | Best (Stay AR) | |
|---|---|---|---|---|
| Year 6 profit | $348,000 | $310,000 | $830,000 | $700,000 |
| Year 7 profit | $400,000 | $340,000 | $980,000 | $820,000 |
| Extra from own AFSL (Y6-7) | +$98,000 | +$290,000 | ||
What Changes With Own AFSL
What We Gain
- Keep 100% of commission (minus AFSL running costs)
- Full independence — no AFSL holder can change terms on us
- Direct insurer relationships in our name
- Higher book valuation (buyers prefer AFSL-holding businesses)
- Can appoint our own ARs if we want to build a network
What We Take On
- Full compliance responsibility (ASIC comes to us first)
- PI insurance to arrange and pay directly ($12k–$20k/yr)
- Annual audits and ASIC reporting
- Responsible Manager obligations
- Partner's legal background becomes critical here
The partner advantage: Getting your own AFSL requires a Responsible Manager with compliance experience. A partner with law and accounting background is ideally qualified for this role — making the transition smoother and cheaper than hiring external compliance support. This is one of the reasons having the right partner from day one matters.
Risk $7k to build an asset worth $38k–$465k that generates $23k–$212k per year.
Profitable from day one in every scenario.
Prepared April 2026. All projections based on industry-verified commission rates and conservative assumptions.