What is the ASIC exemption and how does it apply to an agency and to a financial counsellor?
Financial counselling agencies that engage in credit activity as part of a financial counselling service are exempt from the requirement to hold a credit licence.
The exemption is subject to further conditions including that:
- Financial counsellors do not give advice to clients about purchasing investment products, such as shares or managed investments; and
- No fees or charges are paid by clients for any aspect of the financial counselling service; and
- The financial counselling agency is likewise unable to be remunerated (including by commission) directly or indirectly in relation to any action of the client; and
- The financial counselling agency does not operate or participate in a financial services business beyond the scope of this relief, and takes all reasonable steps to ensure that none of its employees do so.
- In order to obtain this relief, individual financial counsellors must also be members of, or be eligible to be members of, a recognised National or State Financial Counselling Association. Membership requirements themselves set standards about conflicts of interest and professional conduct.
Membership of FCRC satisfies point five above, allowing an agency exemption from holding a credit licence
Read more on the ASIC's website