Running a financial advice business
Information for AFS licensees about running a financial advice business.
AFS licensee obligations
Australian financial services (AFS) licensees have a general obligation to provide efficient, honest and fair financial services. You must comply with the conditions of your AFS licence and the Corporations Act 2001.
Limited AFS licensees
'Limited AFS licensees' are individuals, companies and any other firms that hold an AFS licence that authorises them to provide only one or more limited financial services.
Reference checking
AFS licensees must comply with reference checking and information sharing obligations in relation to an individual seeking to be employed or authorised as a financial adviser.
Dispute resolution
Financial firms must have a dispute resolution system that consists of:
- internal dispute resolution (IDR) procedures that meet the standards or requirements made or approved by ASIC; and
- membership of the Australian Financial Complaints Authority (AFCA).
ASIC Regulatory Guide 267 Oversight of the Australian Financial Complaints Authority (RG 267) sets out who must have a dispute resolution system and which financial firms must be members of AFCA.
Reportable situations
Australian financial services licensees and Australian credit licensees are required to submit notifications about ‘reportable situations’ (previously breach reports) to ASIC, generally within 30 calendar days, in the prescribed form available in the ASIC Regulatory Portal.
Internal dispute resolution data reporting
All AFS licensees who provide financial services to retail clients must submit an internal dispute resolution (IDR) report to ASIC every six months.
Appointing and ceasing an AFS representative
An AFS licensee may appoint ‘authorised representatives’ and 'relevant providers' to provide specified financial services on its behalf.
Financial adviser registration
All relevant providers including time-share advisers must be registered with ASIC. Provisional financial advisers cannot be registered.
Assessment of relevant providers' qualifications
AFS licensees should ensure that a person they intend to authorise as a relevant provider has completed a bachelor or higher degree, or equivalent qualification, that is approved by the Minister.
- More about Assessing relevant providers qualifications
Giving AFS licensees information about their representatives
ASIC may give information about a representative to a licensee to help them make informed decisions about their representatives and appropriately monitor their conduct.
Relief from financial services provisions
ASIC has discretionary powers to grant relief (i.e. by exemption or declaration) from certain legislative provisions. There are three types of applications for relief—standard applications, minor and technical applications and new policy applications.
Industry funding
Under ASIC’s industry funding model, ASIC’s regulatory costs are funded through appropriation from the Commonwealth. These costs are recovered from the industry sectors we regulate through a combination of:
- industry funding levies charged to 52 subsectors, and
- fees for service for user-initiated, transaction-based activities where we provide a specific service to individual entities
- More information about ASIC industry funding
Lodging annual financial statements
Although all companies should keep financial records to ensure they understand how their operations are faring, some types of companies need to keep these records for the purposes of preparing and lodging financial reports with us.
Generally, companies must lodge reports where:
- there are substantial sums of money involved
- the general public has invested funds with the company, or
- the company exists for charitable purposes only and is not intended to make a profit. See charities registered with the ACNC if your company is a charity registered with the Australian Charities and Not-for-Profits Commission.
For more information, see Information Sheet 31 Lodgement of financial reports (INFO 31).
