AFSL Responsible Managers

What is a Responsible Manager?

A Responsible Manager (“RM”) is a nominated person within a business who has the knowledge and skills required by ASIC as per Section C of Regulatory Guide 105 (“RG 105”).

ASIC uses a RM’s experience to assess and demonstrate the organisational competence of your business. RMs are also required to pass a fit and proper person test. All RMs are required to be directly involved in:

  • Overseeing the provision of financial services; and
  • any significant day-to-day decisions in relation to the financial services and products offered by the business.

Finding a suitable RM to support your AFSL application is one of the most important steps in the application process. Each RM nominated as part of your application will need to demonstrate organisational competence in some or all authorisations included in your application. In some circumstances, ASIC may require that applicants have more than one RM.

Experience and Qualifications

responsible

Generally, ASIC requires RMs to have:

  • 3 of the last 5 years’ experience or 5 of the last 8 years’ experience providing financial services under an AFSL with similar authorisations; and
  • tertiary level qualification such as an Advanced Diploma in Financial Services or a Bachelor’s Degree in either Business, Commerce, Economics or Finance.

If you intend to provide personal advice to retail clients, you will need to meet the Financial Adviser Standards by holding an appropriate qualification, completing the exam and completing ongoing professional development on a regular basis.

If you intend to provide general advice to retail clients, the nominated RM must have RG146 in each financial product for which you are seeking authorisations.

ASIC's Five Options for Demonstrating Knowledge and Skills

There are five options you can use to demonstrate your nominated RMs experience to ASIC. The five options are different combinations of training, qualifications and experience for demonstrating that your nominated RM has the knowledge and skills appropriate for their role.

Each option has a knowledge component (generally requiring completion of relevant qualifications or training) and a skills component (generally requiring minimum years of relevant experience).

Option
(1-5)
Knowledge Component
(i.e. qualifications)
Skills
(i.e. experience)
Option 1The nominated RM must meet a widely adopted and relevant industry standard or relevant standard set by APRA.Minimum 3 years relevant experience over the last 5 years.
Option 2The nominated RM must be individually assessed by an authorised assessor as having relevant knowledge equivalent to a diploma.Minimum 5 years relevant experience over the last 8 years.
Option 3The nominated RM must hold a university degree in a relevant discipline and complete a relevant short industry course.Minimum 3 years relevant experience over the last 5 years.
Option 4The nominated RM must hold a relevant industry or product-specific qualification equivalent to a diploma (or higher).Minimum 3 years relevant experience over the last 5 years.
Option 5If not relying on Options 1–4, you need to provide a written submission that satisfies ASIC that your nominated RM has appropriate knowledge and skills for their role. The submission must cover all of the information in RG 105.71. Some example situations where ASIC may, or may not, accept a responsible manager under Option 5 are outlined at RG 105.74.

Refer to Section C of RG 105 for further information.

 

Additional Requirements

All RMs are required to have clear Police and Bankruptcy checks (dated within the last 12 months) and should not be associated with more than one other AFSL either as RM, Director or Shareholder.

ASIC also requires RMs to provide at least two business references who can attest to their financial services experience and good fame and character.

AFSL holders should ensure the arrangements with RMs are appropriately documented in the form of either an employment contract or a Responsible Manager Agreement.

Please contact us for further information on how Sophie Grace can assist you in finding and engaging the right Responsible Manager for your business. 

Quiz - Is My RM Suitable?

Not sure if your RM is suitable, take the quiz below to find out:

Disclaimer: This quiz is to be used as a guide only. Each RM will need to be appropriately assessed before being appointed.

Note: if you do not wish to provide your contact details, simply press 'submit' at the end of the quiz and you will be able to view your results.


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Overview

In this video, Sophie Grace’s Director, Sophie Gerber, explains what a Responsible Manager (“RM”) is.

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