In short
An Authorised Representative Agreement is the contract between an AFSL holder and the individual or corporate representative it authorises under section 916A of the Corporations Act 2001 (Cth) to provide financial services on its behalf. It defines the scope of authorisation, supervision and reporting obligations, remuneration, and the termination and notification steps required when the arrangement ends.
Why the scope clause carries all the risk
Under section 917B, a licensee is responsible for the conduct of its authorised representatives as if that conduct were its own, but only to the extent the representative was acting within the scope of their authorisation. That makes the scope clause the single most commercially important term in the agreement. A vague or over-broad authorisation exposes the licensee to conduct it never intended to sanction; an authorisation that's too narrow relative to what the representative actually does in the market creates a live compliance breach the moment the representative steps outside it, whether or not anyone notices.
We draft scope clauses by reference to the specific financial products and services listed on the licensee's own AFSL, cross-checked against what the representative is actually being engaged to do, rather than adopting boilerplate language lifted from an unrelated licence.
Supervision, monitoring and the paper trail ASIC expects
The agreement has to set out concrete supervision mechanics — file review frequency, escalation triggers, access rights to the representative's client files and communications, and the representative's obligation to cooperate with audits — because 'the licensee will supervise the representative' as a standalone sentence satisfies nobody in a surveillance review. We also build in the representative's positive obligation to notify the licensee immediately of client complaints, potential breaches and any change in their own circumstances (bankruptcy, disqualification, other licence relationships) that could affect their fitness to hold the authorisation.
Remuneration, restraint and exit
Where the representative is remunerated by commission, fee-splitting or a hybrid model, that structure needs to sit consistently across this agreement and the FSG remuneration disclosure — a mismatch between what the representative agreement says they're paid and what clients are told creates a disclosure breach independent of any dispute between licensee and representative. On exit, the agreement needs a clean process for notifying ASIC of the cessation of authorisation (required within 10 business days under section 916F), transitioning client files and records, and dealing with trail commissions or ongoing service arrangements that outlive the authorisation itself.
Restraint of trade clauses are enforceable in this context only to the extent they protect a genuine business interest such as client relationships built using the licensee's systems and brand; a restraint drafted to simply lock in the representative's book will be read narrowly by a court and may not survive scrutiny at all.
Corporate versus individual representatives
Where the representative is a corporate authorised representative (CAR) rather than an individual, the agreement needs an additional layer addressing the CAR's own responsible officers, the licensee's right to require the removal of an individual acting under the CAR's authorisation, and clear allocation of liability for conduct by the CAR's own employees or contractors — a structure that individual representative agreements don't need to address.
What we deliver
An authorisation agreement scoped to the licensee's actual AFSL conditions, with supervision, reporting, remuneration and exit provisions that hold together as a functioning working relationship rather than a static compliance form.
What the fixed fee covers
- Scope of authorisation drafted against the licensee's AFSL conditions
- Supervision and monitoring obligations with concrete review triggers
- Complaint and breach notification requirements
- Remuneration terms consistent with FSG disclosure
- Termination, ASIC notification and client transition process
- Restraint of trade clause calibrated to be enforceable
Mistakes we see
- Scope of authorisation broader or narrower than what's actually on the licence
- No concrete supervision mechanics beyond a general obligation to comply with policy
- Remuneration terms that don't match the FSG given to clients
- No clear process for notifying ASIC within 10 business days of ceasing an authorisation
- Restraint clauses drafted to be punitive rather than protective, risking unenforceability
Who this is for
- AFSL holders onboarding new individual or corporate representatives
- Licensees restructuring remuneration or supervision arrangements
- Businesses converting an employee adviser to an authorised representative model
- Licensees terminating or transitioning a representative relationship
Frequently asked questions
- What's the difference between an authorised representative and an employee?
- Authorisation under section 916A is a regulatory status that can apply to an employee, a contractor or a corporate entity; it doesn't itself determine employment status. The agreement needs to separately address whether the underlying relationship is employment or contracting, because that affects tax, superannuation and Fair Work Act 2009 (Cth) obligations independently of the AFSL authorisation.
- Can a representative be authorised by more than one licensee at the same time?
- Yes, provided each authorisation is properly disclosed and the scopes don't create conflicting or overlapping obligations that neither licensee can adequately supervise. We flag multi-licensing arrangements early because they materially increase the supervision obligations on each licensee.
- What happens to client relationships when the agreement ends?
- This should be addressed expressly in the agreement, not left to negotiation at termination. We typically provide for an orderly handover of client files to the licensee or a nominated successor adviser, with clear rules on what happens to trail commissions and ongoing service obligations for existing clients.
- Do we need ASIC's approval to appoint a new representative?
- No approval is required, but the licensee must notify ASIC of the appointment (and later, cessation) within the statutory timeframe, and must be satisfied the representative meets the training and competence standards applicable to the products and services being authorised.
- Is a restraint of trade clause worth including?
- It's worth including but has to be calibrated. Courts will strike out restraints that go further than necessary to protect the licensee's legitimate interest in client relationships built through its systems and brand, so an unrealistically broad restraint is often worse than a modest, defensible one.
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