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 your businesses organisational competence. ASIC requires RMs to be of good fame and character, or a fit and proper person as per RG 105. They are required to be directly involved in overseeing the provision of financial services and any significant day-to-day decisions that affect your business.

Finding a suitable RM to support your AFSL application is one of the most important steps in the application process. Each nominated RM on your application will need to cover all the authorisations you are seeking to be licensed for as part of your application. ASIC may require that applicants applying for some types of AFSLs have more than one RM.

Experience and Qualifications

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 a similar AFSL; 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 are intending on dealing with retail clients, the nominated RM must have RG146 in each financial product you are seeking authorisation.

Financial Advisers who provide personal financial product advice to retail clients are required to:

  1. tertiary level qualification;
  2. Financial Adviser Exam;
  3. 1 year of professional work experience and training;
  4. CPD annually; and
  5. 12 Code of Ethics Standards.

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). RMs are required to meet both components of an option.

Knowledge Component
(i.e. qualifications)
(i.e. experience)
Option 1 The 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 2 The 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 3 The 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 4 The 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 5 If 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 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.

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