AI's golden era for solo AFSLs: why smaller can be smarter

Smaller AFSLs “going the way of the dodo”? I couldn’t disagree more. 2025 should be a golden era for self-licensed advisers.

The narrative that smaller financial advice firms can’t compete with larger AFSLs misses a fundamental shift happening right now. Yes, the industry is too expensive to operate, and yes, larger licensees continue to expand their reach. But that’s exactly why AI represents such a game-changer for independents.

The AI advantage doesn’t scale linearly

It’s never been easier for independents to scale smart: document generation, compliance monitoring, and deep client insights can now be automated with clever deployment of AI.

Here’s the good news: AI efficiency gains don’t depend on scale — they’re transactional, accessible to firms of any size. A solo adviser can deploy the same document automation, compliance monitoring, and client insight tools as a 500-adviser AFSL. The technology doesn’t care about your firm size.

Nimbleness as a competitive advantage

Nimbleness is a massive edge that small AFSLs possess: no sprawling supervision burden, no diminishing returns across large teams, no bureaucratic decision-making processes that slow down innovation adoption.

When a new AI tool emerges that can streamline client onboarding or automate compliance reporting, a solo adviser can implement it within days. A large AFSL might take months to evaluate, pilot, and roll out the same capability across their network.

Compliance gets manageable

Compliance that once felt overwhelming for smaller AFSLs is now more manageable, at lower cost. AI can:

• Monitor regulatory changes and flag relevant updates automatically
• Generate compliant documentation from simple inputs and templates
• Track client interactions and ensure proper record-keeping
• Audit file management to identify gaps before they become problems
• Automate reporting that previously required dedicated compliance staff

The technology that once required a team of compliance professionals is becoming accessible to individual practitioners.

The real competitive question

The real question isn’t whether smaller AFSLs can survive, but whether they’ll seize the AI toolkit sitting right in front of them.

The opportunity is massive, but it requires a mindset shift. Instead of competing on the same terms as large AFSLs — trying to match their scale and resources — smart independents can compete on agility, personalisation, and efficiency.

The advisers who embrace this AI-enabled model won’t just survive; they’ll thrive. They’ll offer clients more personalised service, faster responses, and deeper insights — all while maintaining the compliance standards that larger firms struggle to achieve consistently across their networks.

If you’re self-licensed and wondering how far you can push the boundaries of efficiency, the answer is: much further than you think.