I don’t have ‘relevant’ experience – Can I get an AFSL or Credit licence?

In considering any AFSL or Credit Licence application, ASIC require ‘relevant’ experience – and furthermore reserve all judgment as to what they deem ‘relevant’ until they see a completed application.

The strongest case for obtaining a licence relates to those who have been an authorized representative under an AFSL or Credit licence for 3 years and now want to embark on getting their own licence. However, this is not the only type of ‘relevant’ experience, and furthermore, even having this experience does not guarantee an AFSL or Credit License.

Approximately 80% of those who approach us for AFSL or Credit licence help simply do not have the required experience to risk undertaking the application process.

If you’re not sure if you have relevant experience, please get in touch for an opinion.

If you are deemed not to have relevant experience, you do have the following options to consider.

1.    Become an authorized representative under someone else’s licence.
This option involves having a current AFSL or Credit licence holder authorize you to trade under their licence. Typically, the licence holder manages the ASIC compliance requirements and sets up systems to ensure you are adhering to, or working in with, their compliance regime.

In 3 years time, having been exposed to a compliant environment, you may then reassess whether you then have the relevant experience required to apply for your own licence.

What are the costs?
Typically the AFSL or Credit License holder will charge a fee for this service. These are negotiated directly with the licensors but typically range around $1,000- $3,000 per month. Some may charge a % of your deals, etc. It’s totally negotiated.

How do we help?
This is a competitive space as you’d appreciate the license holder is exposed to the activities of your business – they put their licence, and thus their own business, at risk with every authorized representative. They are also approached by many prospective authorized representatives.

They need to make sure you have a solid business case and, where they typically manage ASIC compliance requirements, you would need to demonstrate an understanding of such requirements and a commitment to working in with their compliance regime.
Our aim here is to produce a business plan for our customers that documents a solid and thorough financial or credit services business model that will give comfort to current license holders and maximise the likelihood of their granting you an authorized representation.

2.    Have a party with relevant experience become the responsible manager under your licence.

Each AFSL or Credit Licence requires a person to be a responsible manager; that is a person responsible for all ASIC compliance requirements. This person is identified to ASIC and profiled in the application.
In time, and with enough exposure working in a compliant environment, you and others in the organization may apply to also become responsible mangers.
The main risk here is that your AFSL or Credit Licence, and thus the credit or finance activities of your business, are reliant on this party remaining a responsible manager – so choose carefully.

How we help?
Here, we manage the AFSL or Credit application on behalf of the customer.
However, our approach is to put the AFSL or Credit application aside in the first instance and use our strategic planning background to help customers build an ASIC compliant, and solid, business model that includes, but is not limited to, everything ASIC is looking for.
Then, from this solid position, we complete the application.  In fact, completing the application is the last step of this process and frankly is the least onerous once all the ground work has been done.
We do not risk our reputation in the market and with ASIC on completing ‘bare minimum’ ASIC AFSL or Credit applications. Yes, we include all the ASIC requirements such as a compliance plan, staff training plan, customer complaint process, etc. However, we work with clients who are interested in creating an entire solid business model which offers them the best chance of succeeding in both their finance or credit business and succeeding in their AFSL or Credit Licence application.
                              
Some fees you’ll encounter as part of this process;

•    ASIC application fee
•    Government search fees
•    Registering with an approved customer mediation body
•    Financials provided by your Accountant
•    Professional Indemnity insurance

 For assistance please contact The Financial Writing Company 1300 477210.