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To change from Free to Sequencial allocation.. you must be the party leader.

You click on the picture of yourself in yhe character bar (where it shows ur HP and SP), then it should say:

• Quit Party
• Free/Sequencial Allocation
• Cancel

Click on the 2nd one (Free / Seq Allocation) and another menu will come up on the right that'll allow u to choose Free or Seq...

Sometimes when you've just established the party, it may say Free but it could be on Sequencial or vise versa, just click on it again to make sure it's set to the one you wanted.