ASIC does not prescribe a fixed frequency for reviewing representative files or activities. Australian Financial Services Licensees (AFSL holders) and Australian Credit Licensees (ACL holders) should conduct reviews using a documented, risk-based approach. Review frequency should increase where representatives, products, clients or business activities present a higher compliance risk.
Expanded Answer
ASIC expects licensees to determine review frequency based on the risks associated with each representative and the services they provide. A supervision program should be proportionate to the nature, scale and complexity of the business and capable of identifying compliance issues before they become systemic. A fixed annual or quarterly review cycle is not, by itself, evidence of effective supervision if it does not reflect the representative’s risk profile.
A representative with a strong compliance history and low-risk activities may require less intensive monitoring than a newly appointed representative, an adviser providing complex advice, or a representative with previous compliance concerns. Review activities may include file reviews, transaction monitoring, complaints analysis, breach monitoring, client feedback, quality assurance and targeted thematic reviews. Licensees should periodically reassess whether the frequency and scope of reviews remain appropriate as business risks change.
Applies when: representatives provide financial services or credit activities under the licence.
Review more frequently when: compliance issues emerge, products or services become more complex, business volumes increase, or representative risk indicators change.
Do not rely on: a fixed review schedule without documented justification based on risk.
Why it matters
A risk-based review program helps licensees detect misconduct, training needs and systemic issues before they affect clients. An inflexible review schedule may fail to identify emerging risks and may not demonstrate effective supervision during an ASIC surveillance or compliance review.
Unsure how this applies to you?
Get a clear answer in a 15-minute call with a compliance specialist. Book your call
Practical guidance
- Assess each representative’s risk profile before determining review frequency and review scope.
- Increase monitoring promptly when complaints, breaches, file review findings or other risk indicators emerge.
- Document the rationale for review frequencies and reassess them whenever representative or business risks change.
Further reading
How to supervise authorised representatives: A practical guide for AFSL licensees
From samples to signals: A smarter approach to AFSL surveillance
High-level credit file reviews for Australian Credit Licensees