In February 2025, ASIC issued infringement notices to three AFS licensees whose financial advisers provided personal advice while unregistered.

Australian Advice Network Pty Ltd, IA Advice Pty Ltd and Sherrin Partners Services Pty Ltd each paid an infringement notice penalty of $31,300 on 5 March 2025, 21 March 2025 and 24 March 2025 respectively. Payment of an infringement notice is not an admission of guilt or liability.

ASIC acted because it had reasonable grounds to believe that the AFS licensees, had authorised a financial adviser who gave personal advice to a retail client in relation to relevant financial products while the adviser was unregistered.

Failure to register a financial adviser creates a risk for consumers who may receive personal advice from unregistered advisers. The registration requirement is an important consumer protection mechanism to ensure AFS licensees have considered and received declarations about whether their financial advisers are fit and proper and meet the education and training standards. Failure to register financial advisers may also indicate that AFS licensees do not have adequate governance arrangements in place to ensure they comply with the law.

Each AFS licensee immediately registered their financial adviser and breach reported to ASIC after becoming aware of their individual being unregistered. ASIC had regard to these circumstances in deciding its approach to taking enforcement action.

A copy of the infringement notices are published on the Infringement notices register.

ASIC has been actively monitoring the industry's ongoing compliance with the registration requirement for financial advisers and taking steps to raise awareness with AFS licensees and relevant providers.

In January 2024, ASIC Commissioner Alan Kirkland warned that a failure to comply with the registration requirement could incur significant consequences for unregistered financial advisers who continue to provide personal advice and their authorising AFS licensee(s). “The provision of personal advice by unregistered advisers is prohibited and carries significant penalties,” Mr Kirkland said (see ASIC News Article).

Important Reminders

• Financial advisers and their AFS licensees should check the adviser’s registration status on the Financial advisers register to ensure that it says "registered" before the adviser gives any personal advice to retail clients.
• AFS licensees and relevant providers need to be aware of their ongoing registration obligations, ensuring that they understand when an individual needs to be registered and the circumstances which may lead to a relevant provider being unregistered.
• If a financial adviser changes AFS licensee, their new authorising licensee will need to re-register the adviser before the adviser can legally provide personal advice again (see FAQ 21 in INFO 276 Registration for relevant providers).
• The law requires that if a financial adviser breaches the law by giving financial advice while unregistered, ASIC must either refer the financial adviser to the Financial Services and Credit Panel or take its own regulatory action.

Background

In this media release, we have used the term ‘financial adviser’ and ‘relevant provider’ interchangeably.

The registration requirement has applied since 16 February 2024 and means a relevant provider must be authorised by an AFS licensee to provide personal advice and registered with ASIC before giving financial advice to retail clients. A relevant provider is an individual who is a financial services licensee, an authorised representative, or an employee or director of a financial services licensee who is authorised to provide personal advice to retail clients in relation to relevant financial products. AFS licensees must apply to register a relevant provider with ASIC.

The requirement for relevant providers to be registered was introduced by the Financial Sector Reform (Hayne Royal Commission Response—Better Advice) Act 2021 (Better Advice Act) in response to Recommendation 2.10 of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The registration requirement is separate to the pre-existing requirement for an AFS licensee to appoint a relevant provider to the Financial Advisers Register once they have been authorised.

If an authorised financial adviser gives personal advice while unregistered, the adviser breaches s921Y Corporations Act and the AFS licensee breaches s921Z of the Corporations Act.

ASIC has published guidance on its website about registering a relevant provider and recorded a webinar to assist AFS licensees.