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Hi Craig,
Thanks for your query. The information posted by Kathryn above remains correct to date.
Please feel free to contact our financial services team for further guidance about your compliance obligations as an ACL and AFSL representative.
Author: Michelle Chasser
Co-contributor: Amelia Walsh
Hi Patrick,
The requirements are complex and we would strongly advise you and/or your client seek legal advice, especially given the nature of this matter.
It is likely the incident will need to be reported to AUSTRAC and the Police. You should also consider whether it needs to be recorded on the AFSL’s breach register.
For further information contact our financial services team.
Author: Michelle Chasser
Co-contributor: Georgia Dixon
Hi Damien,
Thanks for the question.
As a starting point, we would suggest that you read the licensing kit contained in RG 1, 2 and 3 which can be found on the ASIC website. RG105 will also provide a better understanding of organisational competence and requirements of responsible managers. It includes some information about the education courses accepted by ASIC.
When applying for a financial services license it is often difficult to find a suitable responsible manager to demonstrate the licensee’s competence to provide financial services, and who has the required qualifications and experience.
Under ASIC’s RG105 there are five options available to demonstrate the skill and knowledge required of a responsible manager. To demonstrate skill, the minimum ‘relevant experience’ is 3 years within 5 years. It may be that not all industry experience is accepted, depending on the circumstances. Generally the experience component should be served under another AFSL in the form of qualifications. Working or trading on your own behalf will likely not be accepted. The knowledge component must also be satisfied. RG146 alone may not be enough to meet the requirements.
Given the nature of the forum we refrain from discussing your proposed business structure and the circumstances which relate to your need for a financial services license.
The requirements are complex and we would advise you to seek legal advice on the matter to ensure you meet the minimum requirements set by ASIC.
Please feel free to contact our financial services team if you require further information.
Author: Michelle Chasser
Co-contributor: Georgia Dixon
Hi Giorgia,
Thank you for your question.
The previous advice based on requirements to have a reasonable basis for providing advice has now been replaced by the best interest duty. The best interest duty is a form of consumer protection and only applies to retail clients. We refer you to ASIC Regulatory Guide 175 which contains information on these obligations. As wholesale clients are generally assumed to have greater investment knowledge and experience, the provisions recognise that they do not require the same degree of protection.
Risk profile questionnaires are widely used throughout industry to assist financial providers in understanding their clients’ risk appetite to ensure that advice is appropriate to the client .
For further information please contact our financial services team.
Author: Michelle Chasser
Co-contributors: Joanne Lee and Greta WaltersThanks for your question.
By way of general discussion, an individual is issued with an authorised representative (AR) number which attaches to that person for life. It is not possible for a person to have more than one number assigned to them. The authority which governs what an authorised representative can do on behalf of a licensee may be specified through an AR agreement. It may be possible to draft this agreement to provide for differing duties, depending on the situation.
The AR cannot perform financial services that its licensee is not authorised to perform or that its licensee has not authorised the AR to do. Where two separate CARs have the same director, it may be possible for that director to carry out different authorised financial services, as they relate to the separate CARs. Appropriate written documentation and agreements may be required in order for this to be effectively achieved.
Given the nature of this forum and the limited information available we are unable to give you any specific or tailored advice. We would however suggest that you seek legal advice in order to discuss the matter in the required detail.
Author: Michelle Chasser
Co-contributor: Georgia Dixon
Hi Jake,
Thanks for the question.
Under ASIC’s RG105 there are five options available to demonstrate the skill and knowledge required of a responsible manager. To demonstrate skill, the minimum relevant experience is 3 years within 5 years. Note that this must be ‘relevant experience’. It may be that not all industry experience is accepted, depending on the circumstances. The knowledge component must also be satisfied. RG146 alone may not be enough to meet the requirements, and it’s likely that 2 years industry experience would be insufficient.
David makes a valid point, in that both a licensee and an AR are required to meet the RG146 standards in order to provide financial advice. Given the nature of the forum we refrain from discussing current business structure and compliance.
The requirements are complex and we would advise you to seek legal advice on the matter to ensure potential RM’s meet the minimum requirements set by ASIC.
Please feel free to contact our financial services team if you require further information.
Author: Michelle Chasser
Co-contributor: Georgia Dixon
Thanks for your question.
An AFS licence is required if you are carrying on a business of providing financial services. This may include providing financial product advice to clients, dealing in a financial product, or making a market for a financial product. In applying for an AFS licence you must complete an application form and lodge it with ASIC.
To ensure the licence authorisations you apply for are appropriate to your business requirements, you must be familiar with your business and understand which financial services and products you must select in your application, to enable you to carry on the business. We refer you to ASIC Regulatory Guide 1 which contains information on preparing and applying for an AFS licence.
We refer you also to ASIC Regulatory Guide 212 which contains information on client money.
As the application needs to be tailored to your business and the financial services it offers, we suggest that you seek professional advice. It is important that you adhere to the relevant legislation and regulations.
For further information contact our Financial Services Team.
Author: Michelle Chasser
Co-contributor: Greta Walters
Hi Marie,
We are not aware of any formalised resources that will help you identify a RM for your ACL. We would suggest using your professional networks to identify suitable people that would be willing to work with you, either as a consultant or as an employee.
If your network is unable to help, you could consider utilising a recruitment company to aid in your search, or see if you can access any resources through professional bodies of which you may be a member.
You should refer to ASIC’s RG 206 to determine what experience and qualifications the RM you are seeking requires.
Please feel free to contact us if you require further information.
Author: Michelle Chasser
Co-contributor: James Tselios
Hi KMack,
RMs and representatives who provide third party home loan credit assistance are required to have at Finance and Mortgage Broking qualification to least a Certificate IV by 30 June 2014. This is a specific qualification and having a higher level qualification in a difference discipline will not be sufficient.
Feel free to contact us if you require further information.
Author: Michelle Chasser
Hi Chris,
We have had many discussions with people interested in applying for a licence. The discussions always come down to the same issues; cost, time and expertise.
Cost
Hiring a consultant can represent a large outlay of funds for a new business. Doing it yourself can definitely be the cheaper option, if done right. When doing it yourself you need to be very familiar with ASIC’s requirements. If you run into trouble half way through the application or get the wrong licence authorisations, a consultant’s fees may be similar to help you as it would have been for them to do the application from start to finish.If you decide to complete the application yourself, you can save about 100 hours time by purchasing a template compliance manual to tailor to your business. Creating good compliance policies requires a lot of time and expertise. Navigating the Australian Standards, ASIC guidance and financial services legislation can be time consuming.
Time
Applying for a licence, particularly if you haven’t done it before, is fairly time consuming. If you aren’t in a hurry and have the time to read up on what’s involved, doing it yourself can be a great way to become familiar with the requirements and obligations of licensees. A lot of people use consultants because they just don’t have the time to do it themselves. Depending on what agreement is in place with the consultant, an application may only require an initial meeting and few hours reviewing documents. We have a DIY kit for people who want to do it themselves but don’t want to “start from scratch”.Expertise
As a financial planner, you’ll be comfortable with technical language. Licence applications can be quite technical and require a lot of information presented in a certain way. Consultants draft application documents frequently and know what needs to be included. The experience they have with applications and ASIC also gives them the ability to spot potential issues with the application and makes them well versed in speaking “ASIC”.Licensees have certainly got their own licence in the past without help (ASIC’s licensing kit is quite good) and many have used consultants. It’s a personal choice for the applicant which path they choose. Remember help is always available if needed at any stage of the application – even if it’s just paying for a few hours of time prior to submitting your application to ASIC.
Read further information on our website about applying for an AFSL or feel free to contact our office to discuss further.
Author: Michelle Chasser
If all the moderator does is ‘pass on, publish, distribute or disseminate’ financial product advice of traders within the trading forum, then the moderator should be able to take advantage of an exemption in the Corporations Regulations (Reg 7.1.31) which allows such activities without the need for the moderator (in this case) to be licensed or authorised. But if the moderator selects, modifies or otherwise exercises control over the content they won’t be able to take advantage of the exemption.
If the moderator itself provides any financial product advice on the forum, they will need to be licensed or authorised to provide that advice. And if any of the readers of the advice are retail clients, the moderator will also need to be RG 146 trained.
Author: Michelle Chasser
