Applying for
an AFSL

Do you need an AFSL?

As a general rule, if you operate a business that provides financial services in Australia, you need to hold an AFSL. The most common financial services are financial product advice and dealing, however ASIC provides a good summary of the remaining ones here.

Even if you provide one of the services above, you will still generally only be captured if that service relates to a financial product. While this definition can get complicated, in summary it’s a facility that:

1. makes a financial investment (e.g. a share or a bond);

2. manages financial risk (e.g. am insurance contract, or a hedging instrument like a forward);

3. makes non-cash payments (e.g. most bank accounts or money-transfer services).

If you still think that’s you, note there are many technical exemptions in the Corporations Act. The most commonly used ones involve, in effect, acting under someone else’s AFSL – either by being appointed as an Authorised Representative or through an intermediary arrangement. However there are many others which can apply – for example if you’re applying the services for certain purposes like hedging, or if you are only providing services in relation to your own products.

Why engage an expert? 

If you think you may need an AFSL, it’s generally worth consulting an expert as:

1. Maybe you don’t – it may well be that your specific circumstances make an exemption available to you – OR maybe you can tweak your business model to reduce or eliminate you regulatory exposure; 

2. If you do, it’s important to know for what – the complexity of the process depends heavily on which (and how many) authorisations you actually need, as well as for which types of clients (e.g. retail/wholesale) - at this stage it also important to note that your main limiting factor will often be the qualifications of the Responsible Managers you have at your disposal;

3. The AFSL application process is (arguably unnecessarily) onerous and complex and requires information to be presented in a very particular manner - and every administrative error will generally cost you months in ASIC processing time;

4. If you get an AFSL, you’ll generally need a compliance program which will need to be tailored to your AFSL and your business, and the right firm can provide you with a solution that will satisfy ASIC while protecting your business model - visit our Compliance page to learn more.

Why use AB?

Our clients in this area range from tech startups through to ASX 20 companies, as well as foreign companies with Australian operations – and we take care to tailor our approach to the size and circumstances of every client. Our core value proposition is that we offer top-tier expertise combined with the commerciality of a start-up, all at boutique rates.

We pride ourselves on our commercial approach, which means that our preferred outcome is for you not to need a licence at all. We can point to many happy clients who received a licensing advice from us and didn’t need anything more. 

If it turns out you do need an AFSL, our commercial approach translates to making a painful process as painless as possible for our client. We ensure that you get only get the authorisations you need, and that you know exactly what the process will involve from day 1.

What could it cost?

The cost of an AFSL application process will vary depending on the size/complexity of your business, but we will provide a tailored estimate and are happy to discuss fixed fee arrangements. As a general rule, however, most applications will cost between $7,500 and $25,000.

Yes - we understand that’s a large range – here are a few guidelines to help you figure out where you might fall:

1. The ASIC application fee will generally be $1,488 – $3,721 for most businesses;

2. The base case (low end of the range) is for a business that provides only advice, and perhaps dealing, to wholesale clients.

3. Factors that drive up the cost include complex products (e.g.. derivatives or FX), multiple authorisations that require multiple Responsible Managers, membership of a large corporate group (for fit and proper person IDs), and servicing retail clients – especially if you also hold client money or assets.

Next Steps?

If you’d like to discuss further, please just send us an email using the button below. We are happy to have a free 30-minute chat with you without any further obligation.