Governance Duties Under an Australian Credit Licence (ACL) – Part 3

Monitoring and Meeting Minutes:
We’ve noted the importance of documenting compliance committee meetings and audit findings. Concretely:

• For each compliance review or file audit done, prepare a short report or checklist outcome. For example, if a supervisor reviewed 5 files of a representative, note any findings (e.g., “3 files satisfactory, 2 had missing client living expense evidence, which was rectified after follow-up”). Save these reports in a compliance file.
• Track remediation tasks arising from monitoring. If an issue was found, document what was done (re-training? client rectification? system change?). This shows that identifying an issue led to an action – a feedback loop regulators love to see.
• Keep minutes of compliance committee or management meetings focused on compliance. The minutes should record topics discussed, decisions made (e.g., “decided to implement new checklist for loan applications by next quarter”), and who is responsible for follow-up actions. If you are ever questioned about how leadership exercises oversight, these minutes are prime evidence.
• If any external audits are done (maybe by a consultant or as part of an aggregator’s oversight of its brokers), file those reports and note your responses.

Breach and Incident Logs:
Maintain a Breach Register or incident log. This would list any compliance breaches or incidents (even minor ones) that occur, with details: date, description, who was involved, how it was detected, the impact (e.g., client impact, regulatory impact), and the resolution or corrective action. Also note if it was reportable to ASIC and if/when it was reported. This log is often reviewed by management and auditors. It shows you are transparent internally about issues and dealing with them. ASIC now effectively requires keeping such records because under breach reporting laws you have to assess issues within 30 days and decide if reportable – the process of doing so should be documented. Even if an issue is not reportable, documenting it helps identify patterns (e.g., multiple small incidents might indicate a bigger underlying problem).

Training Records and CPD Evidence:
We mentioned the training register. Ensure you also keep evidence of training: copies of certificates for courses completed, attendance sheets for in-house training sessions, CPD logs with supporting documents if audited. If RMs are members of professional bodies (say MFAA or FBAA for brokers, or FPA for financial planners), they might have CPD logging tools – you can use those and also have an internal copy. This way, if ASIC ever asks “how do you ensure your people are competent?” you can present these records as part of the answer.

Complaint Logs and Resolutions:
Similar to breach logs, keep a Complaints Register for any client complaints (even informal ones). Record how each was resolved, time taken, and outcome (e.g., “Client complained about delay in loan approval, discovered rep error, apologized and expedited – goodwill gesture given”). Under ASIC’s regulatory guidance for Internal Dispute Resolution (now updated in RG 271), financial firms must record and analyze complaints data. While that RG primarily was for AFSL and credit licensees as well, it emphasizes treating complaints data as a rich source of feedback. Also, unresolved complaints that go to AFCA will be reviewed – having a well-documented internal handling can help your case or at least show you tried your best to address the issue.

Documentation and Regulatory Compliance:
Certain regulations specify documents you must produce or keep:

• The NCCP Act and associated regulations have record-keeping requirements. For instance, you must retain records of assessment that a credit contract is “not unsuitable” for a consumer for at least 7 years. Be aware of such specific requirements and incorporate them into your documentation practices.
• If you do responsible lending assessments (which virtually all licensees providing credit assistance or loans to consumers must do), the law expects you to be able to show how you assessed suitability. In any ASIC review, they will ask for these records.
• ASIC’s general approach: they might do random surveillance and ask for, say, 20 client files. How confident are you that each of those 20 will have everything in order? Good documentation ensures you can comply with such requests with minimal stress.

Embracing Digital Documentation (with caution):
Moving to digital records is efficient – but ensure they are secure, backed up, and organized. Implement access controls (client data should be protected under privacy principles). If you use emails for key communication, save those emails to the client file repository (not just left in individual inboxes where they could get deleted or be inaccessible if an employee leaves). Many firms adopt a “paperless office” concept which can work great if discipline is applied in scanning and saving documents methodically.

Retention Policy:
Have a clear policy on how long documents are kept and how they are disposed of when no longer needed. Given statutes of limitations and regulatory requirements, many financial services firms keep records for 7 years at minimum. Some keep indefinitely for archival especially if advice could have long-tail consequences. For credit, consider that loans can last decades; while you might not need all records forever, keeping them at least through the life of the loan plus some buffer is prudent, especially if you might need to defend your advice years later.

Demonstrating Compliance Culture through Documentation:
When a regulator or an external reviewer steps in, the thoroughness of your documentation often serves as a proxy for the rigor of your compliance. If they see complete files, updated manuals, and detailed logs, it gives an impression of a well-run, conscientious operation. Conversely, if documentation is patchy, that can raise suspicions of larger compliance gaps. Well-kept records also make any investigation or audit smoother – you can quickly find and provide whatever is asked, showing that you’re in control of your obligations.

Global Notes:
Globally, regulatory expectations on record-keeping are similar. The US SEC, for example, has extensive books and records rules for investment advisers and broker-dealers, requiring them to maintain specific records for set time periods and to have them readily accessible for SEC inspection. Failure to maintain required records is itself a rule violation. The UK FCA as well in their Handbook (SYSC and other sections) mandates keeping records of assessments, communications, etc. Under EU financial regulations (like MiFID II for investments), they even require recording of phone conversations related to transactions to ensure there’s evidence in case of disputes or investigations.

In summary, documentation is the connective tissue of your compliance governance. It turns intentions and actions into verifiable facts. For the staff, it provides clarity on what to do; for management, it provides information to supervise; for regulators, it provides proof. Cultivate a culture where staff understand that “if it’s not written down, it effectively didn’t happen – so let’s write it down.” That discipline will pay off by protecting the firm and its clients.

Consequences of Poor Oversight and Governance

Having detailed all the duties and systems required, it is important to confront the flip side: what happens if governance duties under an ACL are not fulfilled? The consequences of poor oversight can be severe and multi-faceted, impacting the licensee’s legal standing, financial position, and reputation, as well as causing harm to consumers. This section outlines potential repercussions, supported by real examples where appropriate, to underscore why rigorous compliance and governance are indispensable.

Regulatory Enforcement Actions:
ASIC possesses strong powers to take action against credit licensees and individuals for breaches of obligations. Consequences can include:

• License Suspension or Cancellation: Under section 55 of the NCCP Act, ASIC can suspend or cancel an ACL if the licensee is failing to meet its general conduct obligations, among other grounds. This is a devastating outcome for a business, as it legally cannot operate in credit activities without the licence. ASIC has actively used this power. For example, in 2025 ASIC conducted a crackdown on licensees who had failed basic obligations – it cancelled seven credit licences and suspended one in a short span for breaches such as not maintaining membership of AFCA (the dispute resolution scheme) and not lodging annual compliance certificates or paying regulatory levies. These may seem like “administrative” lapses, but they reflect poor governance and ASIC responded by removing those businesses from the industry, at least temporarily. The message is clear: even what might seem like minor or paperwork-related obligations, if ignored, can cost you your licence.
• Imposition of Additional Licence Conditions: ASIC can add or vary conditions on a licence to address compliance issues. For instance, they might impose a condition that the licensee engage an external compliance consultant to oversee the business, or a condition restricting certain high-risk activities until systems are improved. While this is not as harsh as cancellation, it can be costly and publicly signaled, affecting business operations and reputation.
• Enforceable Undertakings (EUs): ASIC may accept an enforceable undertaking from a licensee as an alternative resolution. This is a legal agreement where the licensee promises to take certain corrective actions – such as compensating customers, improving compliance processes, submitting to periodic audits – and sometimes includes a clause of not being able to take on new business for a period. EUs are public and effectively put the firm on a probation with required rectification steps. They usually arise from significant compliance breakdowns but where the licensee cooperates to fix them.
• Civil Penalties and Court Actions: Serious breaches of credit laws (like engaging in credit activities without a licence, or breaching responsible lending obligations systemically, or mis-selling loans) can attract civil penalty proceedings. ASIC can take a licensee (and sometimes individuals) to court, seeking declarations of contravention and financial penalties. Since the enhancement of ASIC’s penalty powers post-Royal Commission, civil penalties can be very large (into millions of dollars for companies, depending on the benefit obtained or harm caused, capped by formulas in legislation). While many enforcement cases in credit have historically been around unlicensed conduct or responsible lending failures by lenders, an ACL holder with egregious governance failures (say knowingly allowing unfit representatives to operate or ignoring widespread misconduct) could face such court action.
• Banning or Disqualifying Individuals: ASIC can permanently or temporarily ban individuals from providing credit services (or any financial services) if they are found to be not fit and proper or to have contravened financial laws. Responsible Managers and directors who preside over serious compliance failures can be personally banned. A recent example we looked at was ASIC banning a Responsible Manager who was essentially derelict in his duties (acting as RM in name only while not actually overseeing the business, which then engaged in misconduct). ASIC also has powers to disqualify directors of financial services companies in some cases. Being banned or disqualified is career-ending in financial services and comes with public shaming via ASIC’s published notices and registers.
• Infringement Notices: For some contraventions, ASIC can issue infringement notices (which are like fines that avoid court proceedings). These might be used for straightforward breaches – for example, failing to lodge something on time might result in a monetary fine through a notice. While smaller in impact, they still are a blemish and a cost.

Legal Liability and Customer Redress:
Poor compliance can lead not only to regulatory action but also legal liability to clients or third parties:

• Clients who suffer loss due to a breach (say being given an unsuitable loan that causes them financial harm) may take legal action against the licensee for compensation. Under the NCCP Act, there are provisions allowing courts to grant remedies to consumers for maladministration in lending or breaches of responsible lending. There’s also the possibility of class actions if multiple customers are wronged. These can result in significant compensation payouts, and even if insured, will drive up your professional indemnity premiums or cause reputational harm.
• Through AFCA, customers can also seek redress. AFCA can make determinations requiring a licensee to pay compensation up to certain limits. A pattern of complaints going to AFCA (especially if decided against the firm) is a red flag for ASIC and a sign of governance issues. It’s far better to handle issues in-house proactively than let them escalate to external dispute resolution.

Reputational Damage:
Trust is central in financial services. If your governance lapses become public – whether through an ASIC press release about an enforcement action, AFCA published determinations, or media reports – it can quickly erode confidence among clients and business partners. Consider the following:

• Loss of Client Trust: Existing clients may leave and prospective clients will think twice before engaging you. For instance, if news spreads that your licence was suspended or you were found recommending loans not suited to client needs, why would a new customer trust your advice? In the age of online reviews and social media, reputational hits can circulate widely.
• Referral Sources and Partners Reaction: Many credit advisers get business through referrals (real estate agents, accountants, etc.) or operate under aggregators and lender panels. A tarnished compliance record could lead to partners severing ties. Aggregators might drop a broker who endangers the group’s reputation. Lenders might remove a broker from their accredited list if they suspect poor practices. These indirect effects can cut off vital business streams.
• Employee Morale and Turnover: Internally, if a firm gains notoriety for wrongdoing, good employees may depart (they don’t want association with a tainted brand on their resume, or they disagree with unethical practices). Recruiting new talent becomes harder too. On the flip side, a strong compliance culture can actually be a selling point to attract high-caliber staff who value integrity.
• Business Viability: In severe cases, the combination of regulatory sanctions, legal costs, and lost business can threaten the very existence of the company. We’ve seen financial advice firms go into administration after the Royal Commission fallout due to remediation costs and lost revenue. A credit business could likewise fold if the hits are big enough – for example, if a major portion of their client base were impacted by misconduct requiring compensation and the firm must foot the bill or if the licence cancellation forces closure.

Case Study Examples:
To illustrate, here are a few anonymized scenarios reflective of real events:

• Case 1: The Negligent Broker Aggregator: A mid-sized aggregator allowed brokers under its licence to operate with minimal oversight. One broker engaged in fraudulent documentation (altering payslips to get loans approved). This went undetected until many loans defaulted. ASIC investigated and found the aggregator had virtually no monitoring in place – no file checks, no training on fraud detection. ASIC cancelled the aggregator’s ACL for failing its obligations, and banned the rogue broker. The aggregator’s business imploded (brokers scattered to competitors, and it faced lawsuits from lenders stuck with bad loans).
• Case 2: The Conflicted Adviser: A financial planning firm with an ACL on the side steered clients needing debt help into expensive in-house credit products that earned the firm high commissions, instead of objectively comparing options. Clients ended up in unsuitable debt consolidation loans with high fees. Complaints led to AFCA ordering refunds of fees and interest to multiple clients. The pattern caught ASIC’s attention, leading to an enforceable undertaking requiring the firm to cease that practice, review all past cases, and compensate broadly – costing millions. The firm’s name was in the headlines, and they eventually rebranded and changed management to distance from the scandal.
• Case 3: Administrative Failures: A small lender failed to renew their AFCA membership due to oversight, and also forgot to lodge an annual compliance certificate and some credit returns. ASIC, upon finding out, immediately suspended the licence. The lender had to scramble to get back into compliance and apply for re-instatement, during which time they couldn’t write new loans. Customers and brokers lost confidence and some moved to other lenders, inflicting lasting damage beyond the temporary suspension.

Industry-wide Consequences and Reputation:
It’s worth noting that poor governance at one firm can also fuel stricter regulation for the entire industry. The Australian financial sector has learned this the hard way: misdeeds by some led to the Royal Commission, which then resulted in a swathe of new laws and tougher requirements for everyone (best interests duty for brokers, FAR to come, etc.). Similarly, in the UK, high-profile bank governance failures spurred regulators to extend the Senior Managers Regime to all financial firms (including consumer credit firms) to ensure accountability. So every participant has a stake in maintaining high standards – it keeps the regulatory burden manageable and public confidence in the sector intact. Financial planners in particular operate under heavy scrutiny now; demonstrating robust credit advice governance is part of upholding the profession’s standing.

Personal Consequences for Managers and Advisers:
Aside from formal bans or penalties, there’s a personal toll. Being involved in a compliance breach investigation is stressful and time-consuming. It can distract from running the business or advising clients for months or years. It can also be a hit to one’s personal reputation – for example, being named in ASIC’s media releases can follow you around on internet searches, impacting future career opportunities. There may be director liability concerns too: if a company breaches the law, in some cases directors can be accessorily liable or face action for failing their director’s duties (for not taking reasonable steps to prevent the company’s misconduct). This underlines why directors must care about compliance – it’s not only the company’s neck on the line, but potentially theirs.

Loss of Professional Qualifications or Memberships:
Advisers often hold memberships or certifications (like CFP for planners, or membership in MFAA/FBAA for brokers). Significant compliance breaches can lead to expulsion from these bodies or loss of those designations, which further hurts credibility. These bodies usually have codes of ethics and disciplinary processes. Being kicked out can also mean loss of certain industry privileges or client pools.

In essence, poor governance is a path to business self-destruction. Conversely, good governance is an investment in sustainability. Companies with strong compliance cultures often tout that they avoid costly mistakes and have more satisfied customers who trust them, leading to better retention and referrals. There’s also evidence that regulators are more inclined to be lenient or work informally with firms that can demonstrate they generally have their act together except for an isolated slip – whereas if they sense a culture of neglect, they come down hard to send a message.

Having traversed the duties, best practices, and consequences related to governance under an ACL, we’ll now draw the threads together in conclusion, reinforcing why all these measures are worthwhile and how they empower advisers and managers to excel in their professional roles.

Global Regulatory Comparisons and Best Practices

Before concluding, it’s useful to put the Australian requirements in an international context. Financial services regulation across jurisdictions often rhyme with each other, as all aim to protect consumers and ensure market integrity. By examining global regulatory bodies’ approaches to governance and compliance, Australian financial planners and credit advisers can glean insights and affirm that the principles behind ASIC’s expectations are part of a broader consensus on best practice.

Australia (ASIC and APRA) vs. United Kingdom (FCA/PRA):
Australia’s ASIC oversees conduct in financial markets similar to the UK’s Financial Conduct Authority (FCA), while APRA (for prudential matters) parallels the UK’s Prudential Regulation Authority (PRA) in some ways. For credit licensees, ASIC is the main regulator (APRA would only be involved if the entity is also a deposit-taking institution like a bank). Key comparisons:

• The ASIC general obligations for licensees (both ACL and AFS) are analogous to the FCA’s Principles for Businesses. For instance, ASIC’s “efficiently, honestly, fairly” mirrors FCA’s Principle 6 (treat customers fairly) and Principle 2 (conduct business with due skill, care, diligence). Both require resources and risk systems – FCA Principle 3 says “take reasonable care to organize and control its affairs responsibly and effectively, with adequate risk management systems.” So, an Australian licensee following ASIC rules is inherently meeting what an FCA-regulated firm would also be expected to do. It affirms that honesty, fairness, diligence are universal touchstones.
• The UK has the Senior Managers & Certification Regime (SMCR) (since 2016 for banks and 2019 for other financial firms, including consumer credit firms). Under SMCR, specific individuals in key roles (like CEO, heads of key business areas, head of compliance) are registered as Senior Management Functions (SMFs) and have documented Statements of Responsibilities. They have a legal “Duty of Responsibility” – if their area has a failure, regulators will ask whether they took reasonable steps to prevent it. There’s also a Certification Regime where other staff (like advisers) must be certified annually as fit and proper by the firm, and conduct rules that apply to all staff. This framework has sharpened personal accountability in the UK. The effect is similar to ASIC’s focus on Responsible Managers and directors, but even more formalized. Australia’s proposed Financial Accountability Regime (FAR) is set to introduce a similar approach for senior executives in financial entities (initially banks, then likely others like ASIC-regulated entities). FAR will create obligations for accountable individuals and impose penalties if they fail to meet them. The trend shows Australia aligning with the UK’s approach that management must not only be competent but clearly accountable for compliance in their domain.
• In the UK, the Approved Persons Regime (prior to SMCR for consumer credit firms) required those controlling a firm to be approved and meet threshold conditions (akin to fit and proper criteria). Post-SMCR, the emphasis is on having a compliance officer, risk officer etc., who are directly accountable. Australian firms can learn from SMCR’s impact: many UK firms improved governance structures, clarified committee terms of reference, and strengthened documentation of decision-making because they had to map everything out for regulators. It’s a best practice to map your own governance (who is responsible for what risk, what committees oversee what) even if not mandated – it identifies gaps or overlaps.

United States (SEC, FINRA, CFPB):
The US regulatory environment is more fragmented (multiple regulators), but principles still align:

• SEC (Securities and Exchange Commission) regulates investment advisers and public companies. For an analogy, if one considered a large credit provider that is publicly listed, the SEC-style emphasis on accurate disclosures and corporate governance comes into play (though ASIC covers that in Australia through the Corporations Act for public companies). For investment advisers, as noted, the SEC’s compliance program rule (206(4)-7) basically requires what ASIC expects – a written program, annual reviews, a Chief Compliance Officer, and documented policies. US regulators also stress “tone at the top” in enforcement cases; they often cite whether management promoted compliance or was complicit in cutting corners.
• FINRA (Financial Industry Regulatory Authority) governs brokers (including those who might advise on credit-like securities or margin lending etc.). FINRA’s rules on supervision and an entire suite of rules around ethical sales practices echo our discussion. For example, FINRA has rules against conflicts like “selling away” without disclosure, rules requiring fair dealing with customers, and specific suitability obligations. A concept from FINRA that’s globally recognized is “failure to supervise” – firms or managers can be fined or barred if they don’t supervise their reps adequately. This is exactly what ASIC’s “ensure reps comply” obligation gets at. So if an Aussie licensee wants to be world-class, they would adopt the same stance: rigorous supervision or face similar consequences.
• Consumer Financial Protection Bureau (CFPB): In the US, consumer credit (like mortgages, credit cards) is regulated by the CFPB and other bodies. The CFPB has been aggressive in enforcing fair lending and consumer protection laws. They hold companies liable for things like unfair, deceptive, or abusive acts/practices (UDAAP). While Australia’s law uses different terms, the spirit is similar (our ASIC Act prohibits misleading or deceptive conduct, etc.). The CFPB often requires companies to implement robust compliance management systems as part of consent orders. They expect board oversight of compliance in supervised entities, and that companies have compliance audit functions. The overlap with ASIC’s expectations is again notable.
• Professional Standards in US: For financial advisors, although not directly credit, the Certified Financial Planner (CFP) Board’s standards include a fiduciary duty to clients, managing conflicts, and a duty of competence – all parallel to what we’ve covered. So globally, professional bodies reinforce regulatory standards.

Other Jurisdictions:
Many other countries have analogous frameworks. In Canada, for instance, mortgage brokers are regulated at the provincial level but generally must follow rules on suitability and have certain education and licensing requirements, with regulators able to revoke licences or fine for misconduct. In Singapore and Hong Kong, regulators impose fit and proper requirements on licensed persons, mandatory compliance arrangements, and have in recent years emphasized culture and conduct (e.g., the Monetary Authority of Singapore introduced guidelines on risk culture). The International Organization of Securities Commissions (IOSCO) and other international standard setters often publish principles that converge on the same themes: clear responsibility, compliance systems, and treating customers fairly.

Global Best Practice Highlights:

• Embed Ethical Culture: Across the board, those firms that truly excel go beyond mere rule compliance and foster an ethical culture. They empower employees to speak up, they make doing the right thing everyone’s responsibility (not just compliance department’s). This was a lesson from multiple scandals – rules on paper didn’t stop wrongdoing if the culture encouraged sales at any cost.
• Use of Technology (RegTech): Globally, there’s a push to adopt Regulatory Technology to automate compliance and oversight. For example, tools that automatically monitor communications for red flags, software that tracks regulatory changes and maps them to company policies, or data analytics to predict where risks might spike. Australian firms might consider suitable RegTech solutions to stay ahead (ASIC even has encouraged fintech/regtech trials in some areas).
• Third Line of Defense – Internal Audit: Larger firms often implement a “three lines of defense” model (1st line: business unit responsible for doing things right, 2nd line: compliance/risk overseeing, 3rd line: internal audit providing independent check). While not explicitly required by ASIC for all, it’s a gold standard. Having periodic independent audits of your credit license compliance (either by an internal audit team or an external reviewer) can catch gaps and is something global banks do routinely. Smaller outfits can adapt the principle by at least having an external consultant review their compliance annually or bi-annually.
• International Standards Certification: Some companies choose to get certified under ISO standards (like ISO 37301 for compliance, ISO 27001 for information security, etc.) to demonstrate to stakeholders their commitment. This isn’t necessary for all, but pursuing even a self-assessment against these standards can strengthen your program.

By studying these global approaches, Australian advisers and managers can be reassured that the effort put into governance under an ACL is aligned with worldwide trends. In fact, being knowledgeable about overseas frameworks can be a value-add in client conversations (“Our practice follows not only Australian requirements but we also benchmark against leading international standards – you’re in safe hands with us.”). It also means one can anticipate likely regulatory developments (e.g., FAR bringing accountability akin to SMCR – knowing SMCR now means you’ll be ready when FAR arrives).

Conclusion

Governance duties under an Australian Credit Licence are extensive, but they boil down to a simple core: take ownership of doing the right thing by your clients and the law, every single day, at every level of the business. For financial planners and credit advisers in Australia, excelling in these duties is not just about avoiding ASIC’s wrath – it’s about professional integrity and building a sustainable, respected practice.

In this module, we explored how advisers and managers can fulfill these duties with rigor and accountability. We began with the broad obligations set by ASIC, covering everything from fairness in dealing with clients to maintaining the resources and systems for compliance. We discussed the crucial roles of Responsible Managers and directors, emphasizing that leadership and tone from the top are decisive factors in a licensee’s compliance success.

Maintaining competence was identified as a continuous journey: through training, CPD, and recruitment of qualified people, a licensee keeps its skills sharp and its knowledge up-to-date amid changing regulations and market conditions. We highlighted that supervision is where policy meets practice – the daily acts of oversight, file checking, and coaching that ensure representatives actually follow through on their training and ethical duties.

We delved into establishing compliance systems – essentially building a “compliance engine room” with policies, procedures, committees, and controls that make compliance an embedded part of operations rather than an afterthought. The management of conflicts of interest received special focus, given how pernicious conflicts can be if unchecked; we saw that transparency, alignment of incentives, and the new best interests obligations are key tools to ensure clients’ interests always prevail.

The phrase “if it’s not documented, it didn’t happen” guided our discussion on documentation – showing that thorough record-keeping and evidence are not bureaucratic red tape but the bedrock of demonstrating accountability and learning from mistakes. And we confronted the stark consequences that can befall individuals and firms that neglect these governance responsibilities: regulatory sanctions, financial losses, and irreparable reputational harm.

Across each topic, the consistent thread was proactivity. Compliance and good governance are not static obligations you address once – they require active, ongoing management. It’s about building habits and systems that continuously monitor, review, and improve how you operate. This mindset turns compliance from a burden into a source of strength. A well-governed firm tends to also be well-run in other respects; it can actually be more efficient (fewer errors to fix), more attractive to clients (who appreciate integrity and clear communication), and more adaptive to change (because it monitors its environment and updates practices regularly).

For Australian financial advisers specifically, meeting CPD standards through modules like this not only ticks a box but ideally translates to better practice management. The knowledge of global regulatory comparisons indicates that none of these expectations are arbitrary or unique to one regulator’s whim – they are part of a global movement toward higher accountability in finance. Clients today are more informed and regulators more empowered; the industry’s bar has been raised, and advisers who embrace that will thrive, whereas those who resist may find themselves edged out.

Finally, by completing this deep dive, advisers and managers should feel more prepared and confident in their ability to discharge their ACL duties. It’s not merely about avoiding penalties; it’s about taking pride in running a practice that genuinely helps clients achieve their goals while safeguarding their interests. Good governance and compliance are ultimately extensions of good client service – they ensure that clients can trust the advice and credit assistance they receive.

In conclusion, rigor and accountability in governance under a credit licence are not just regulatory buzzwords – they are the keystones of being a true financial professional. Upholding these duties protects your clients, your licence, and the reputation of the financial planning profession as a whole. It creates a business environment where ethical, client-centered advice flourishes. By implementing the practical frameworks and best practices discussed, you position yourself and your firm to not only meet ASIC’s requirements but to excel in delivering quality, compliant credit advice. That is a win-win for consumers and advisers alike: clients get better outcomes and advisers build trust and longevity in their careers.

References:

1. ASIC Regulatory Guide 205 – Credit Licensing: General Conduct Obligations (April 2020).
2. ASIC Regulatory Guide 206 – Credit Licensing: Competence and Training (April 2020).
3. National Consumer Credit Protection Act 2009 (Cth) – Section 47 (General conduct obligations of credit licensees) and related provisions.
4. Holley Nethercote, “Top 10 Mistakes Credit Licensees are Making – and how to prevent them” (Zoe Higgins, Oct 2019).
5. ASIC Media Release “ASIC cancels credit licences over AFCA failures and compliance breaches” (18 Jul 2025) – detailing recent enforcement actions for governance lapses.
6. ASIC Media Release “ASIC cancels AFS licence of Financial Services Group Australia and permanently bans its responsible manager” (13 Jun 2025) – example of individual accountability for poor compliance oversight.
7. Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry – Final Report (Commissioner Kenneth Hayne, 2019), especially observations on governance, culture, and accountability of boards and senior management.
8. Financial Conduct Authority (UK) – Senior Managers and Certification Regime (Overview and Guidelines, 2019) and FCA Handbook PRIN (Principles for Businesses) and SYSC (Senior Management Arrangements, Systems and Controls).
9. FINRA (US) – Rules 3110, 3120, 3130 on Supervision and related FINRA guidance on supervisory systems (2014-2022).
10. ISO 37301:2021 – Compliance Management Systems – Requirements with guidance for use (International Organization for Standardization, 2021) – highlights of principles of good governance, risk-based compliance management, and continuous improvement.
11. Mortgage Brokers Best Interests Duty – introduced by the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth), with ASIC Regulatory Guide 273 (released 2020) providing guidance on complying with the duty.
12. CFA Institute Code of Ethics and Standards of Professional Conduct (2014 Edition) – particularly standards on duties to clients and conflicts of interest, illustrating professional expectations aligning with regulatory aims.
13. ASIC Regulatory Guide 271 – Internal Dispute Resolution (effective 2021) – for insight on handling and recording complaints in line with ASIC-approved standards (applicable to credit licensees’ IDR processes).
14. Norton Rose Fulbright, “SMCR for Consumer Credit Firms: More change!” (August 2019) – discussion of extending UK’s Senior Managers & Certification Regime to consumer credit firms and its governance implications.
15. U.S. SEC, 17 C.F.R. §275.206(4)-7 – Compliance procedures and practices (SEC “Compliance Rule” for investment advisers, 2003) and SEC Speech “The Role of Chief Compliance Officers Must be Supported” – emphasizing the importance of empowered compliance functions.