Informed consent for commission payments must be documented in a way that clearly evidences what was disclosed, when consent was given, and that the client agreed before the insurance was issued. ASIC expects AFS licensees to retain this record and provide a copy to the client.
Expanded Answer
ASIC allows informed consent to be obtained either in writing or verbally, but the documentation requirement is strict. Where written consent is obtained, the document itself must capture the required disclosures and the client’s agreement. Where consent is verbal, the adviser must create a written record that accurately reflects the discussion and the client’s consent.
The record should include key details disclosed to the client, such as the insurer (if known), commission amount or rate, frequency and duration of payments, and any related services. It should also clearly show that consent was obtained before the policy was issued. Acceptable formats include signed consent forms, file notes, call recordings supported by written summaries, or CRM entries—provided they are clear, complete and retrievable.
These records should be kept for at least five years and must include:
- Copies of the information disclosed to the client.
- Records of any changes to the information provided and evidence of the client’s consent.
- Written or verbal consent from the client, along with the date the consent was obtained.
- Documentation of when the client was provided with a copy of their consent.
These steps ensure compliance with section 963BB(1) of the Corporations Act and help mitigate potential conflicts of interest arising from receiving commissions. ASIC also expects licensees to retain these records (typically for at least five years), provide a copy to the client as soon as practicable, and monitor the quality of records as part of their compliance systems. For further context, see client consent: a compliance cornerstone and trust-building tool and why product consent forms aren’t enough.
Why it matters
Poor or incomplete documentation is a common failure point. If consent cannot be evidenced, ASIC may treat it as not obtained, exposing licensees to conflicted remuneration breaches and enforcement risk.
Practical guidance
- Capture all required commission disclosures and the client’s agreement in a clear, dated record
- Provide the client with a copy of the consent (or written record of verbal consent) promptly
- Store and monitor consent records within your compliance systems to ensure consistency and audit readiness
Further reading