Good compliance in an advice business means having compliance infrastructure and behaviours that consistently meet AFSL obligations in practice, not just on paper. This includes clear processes, a risk-based approach to supervision, accurate records, timely breach reporting, and consistent consequence management, supported by a culture where compliance is part of everyday decision making.
Good compliance typically includes
- Clearly documented and followed advice processes
- Risk-based supervision and monitoring
- Accurate and complete records
- Timely breach identification and reporting
- Consistent consequence management
Expanded Answer
Good compliance is operational, embedded, and repeatable. It is not just a set of policies. ASIC expects compliance infrastructure to be actively used, monitored, and capable of operating effectively across the business.
In practice, this means advice processes are clearly documented and consistently followed, from client onboarding through to ongoing review. File notes, Statements of Advice, and records are complete, accurate, and easy to audit.
Supervision is risk-based. Higher risk advisers, clients, or strategies receive greater oversight, while lower risk activities are monitored appropriately. Regular file reviews, audits, and oversight are used to detect issues early and reinforce consistent standards.
Breaches and issues are identified, assessed, and reported within required timeframes, with appropriate remediation where needed. This is supported by a structured approach to escalation and decision making.
Consequence management is consistent and predictable. Where issues are identified, responses are proportionate and applied consistently, whether through additional supervision, training, or disciplinary action. This reinforces standards across the business.
Governance is clear and effective. Responsible Managers and key staff are actively involved, understand how advice is delivered, and take accountability for how compliance infrastructure operates in practice.
If the business is a reporting entity, AML/CTF obligations are integrated into client processes and monitored.
Importantly, good compliance is proportionate. It reflects the size, complexity, and risk profile of the business rather than relying on generic templates.
In practice, good compliance looks like consistency. The business can demonstrate that its compliance infrastructure is applied reliably across different advisers, clients, and situations.
Why it matters
Strong compliance reduces the risk of client harm, remediation costs, and regulatory action. It also makes audits and ASIC surveillance more manageable and demonstrates that your compliance infrastructure is operating effectively in practice.
Practical guidance
- Build compliance infrastructure that is usable, tested, and aligned to how your business actually operates
- Apply a risk-based approach to supervision, monitoring, and file reviews
- Ensure breaches and issues are escalated, assessed, and resolved consistently
- Implement clear and predictable consequence management to reinforce standards