ASIC doesn’t prescribe a fixed frequency for reviewing representative files or activities. Australian Financial Services Licensees and Australian Credit Licensees should determine review frequency using a documented, risk-based approach. Reviews should occur often enough to identify compliance issues promptly, with more frequent monitoring where representatives, products or client risks are higher.
Expanded Answer
ASIC expects licensees to tailor representative monitoring to the risks within their business rather than adopting a standard annual, quarterly or monthly review cycle. A documented supervision framework should explain how review frequency is determined, what activities are reviewed and which risk indicators trigger additional monitoring. A fixed schedule alone does not demonstrate effective supervision if it does not reflect the representative’s risk profile.
Representatives providing complex advice or credit assistance, handling vulnerable clients, introducing new products, or demonstrating recurring compliance issues generally require more intensive monitoring than experienced representatives with strong compliance records. Reviews should draw on multiple information sources, including file reviews, transaction monitoring, complaints, breaches, incidents, quality assurance findings, client feedback and management reporting. Licensees should periodically reassess review frequency as representative performance, business activities and regulatory risks change.
Applies when:
Determine review frequency using documented representative and business risk assessments.
Increase review frequency where compliance concerns, complaints, breaches or significant business changes increase regulatory risk.
Do not rely on:
A fixed review cycle without evidence that it remains appropriate to the representative’s current risk profile.
Why it matters
A risk-based review program enables licensees to identify emerging compliance issues before they become systemic. It also provides evidence that supervision is responsive to changing risks, supporting stronger governance and demonstrating effective oversight during ASIC surveillance.
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Practical guidance
- Assess each representative’s risk profile before determining the scope and frequency of reviews.
- Increase monitoring promptly when complaints, breaches, file review findings or other risk indicators emerge.
- Review and document the effectiveness of the review program whenever representative or business risks change.
Further reading
How to supervise authorised representatives: A practical guide for AFSL licensees
How licensees can ensure adviser compliance without micromanaging
A practical guide to high-level credit file reviews for Australian Credit Licensees