What is an AFS Licence?

The licence that authorises financial advice in Australia

An Australian Financial Services licence - commonly called an AFS licence or AFSL - is the legal authorisation required to provide financial services in Australia. If a person or business is giving you personal financial advice, dealing in financial products, or operating a managed investment scheme, they must hold an AFS licence or be authorised under one. It is the foundational credential of the Australian financial services industry.

Who issues AFS licences

AFS licences are issued by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. ASIC assesses each applicant against a set of requirements before granting a licence, and has ongoing powers to impose conditions, suspend or cancel licences if a licensee fails to meet their obligations.

The licence itself is held by a legal entity - a company or individual - rather than by an employee. Financial advisers who work for a licensee are authorised representatives of that licensee rather than licence holders themselves. This is an important distinction because the licensee is ultimately responsible for the conduct of its authorised representatives.

What an AFS licence authorises

An AFS licence is not a single blanket authorisation - it specifies exactly which financial services and financial products the licensee is permitted to deal in or advise on. A licence might authorise advice on some products but not others. Common authorisations include:

Deposit and payment products - basic banking products

Managed investment schemes - including managed funds and ETFs

Superannuation - advice about superannuation funds and strategies

Securities - shares and other exchange-traded products

Life risk insurance products - life cover, TPD, income protection

Standard margin lending facilities - leveraged investment products

The specific authorisations held by a licensee determine what their authorised advisers can legally advise on. This flows through to individual adviser profiles on the ASIC Financial Advisers Register, where each adviser's product authorisations are listed.

The difference between a licensee and an authorised representative

Most financial advisers you'll encounter are not licence holders themselves - they are authorised representatives of a licensee. The licensee might be a large financial planning firm, a bank subsidiary, or a boutique advice practice that holds its own licence.

As an authorised representative, the adviser can only provide advice within the scope of the licensee's authorisations. If the licensee's licence doesn't cover a particular product, no adviser under that licence can advise on it regardless of the adviser's personal qualifications.

The licensee also bears legal responsibility for ensuring its authorised representatives comply with their obligations. If an adviser under a licence gives you advice that breaches their legal obligations, the licensee is the entity you would first complain to - and potentially the entity that ASIC would take action against.

What AFS licensees are required to do

Holding an AFS licence comes with significant ongoing obligations under the Corporations Act. Licensees must:

Maintain the financial, human and technological resources to provide their services efficiently and honestly. Comply with financial services laws. Have adequate risk management systems. Maintain adequate professional indemnity insurance. Ensure their authorised representatives are trained and competent. Have an internal dispute resolution process. Be a member of the Australian Financial Complaints Authority (AFCA) as the external dispute resolution scheme.

ASIC monitors compliance with these obligations and can impose conditions on a licence, suspend it or cancel it entirely if a licensee falls short. Licence suspensions and cancellations are published on the ASIC register and in ASIC's media releases.

How to verify an AFS licence

You can verify whether a firm holds a current AFS licence through ASIC's professional registers at connectonline.asic.gov.au. Search for the firm name under "Australian Financial Services Licensee" to see the licence status, the authorisations it covers, and any conditions or restrictions that apply.

Individual adviser authorisations flow from the licensee's licence, so checking both the adviser on the Financial Advisers Register and the licensee on the professional registers gives you a complete picture of who you are dealing with and what they are authorised to do.

You can also check how to verify an adviser's registration for a step-by-step guide to using the ASIC Financial Advisers Register.

What happens when an AFS licence is suspended or cancelled

If a licensee's AFS licence is suspended or cancelled, all authorised representatives under that licence lose their ability to provide financial services - even if their individual registrations remain current. This is one reason why verifying the licensee as well as the individual adviser matters.

ASIC publishes all licence suspensions and cancellations in its media releases. Our Industry News section reports on significant regulatory actions including licence suspensions as they occur.

Finding a licensed adviser

All financial advisers authorised to provide personal financial advice in Australia must be registered on the ASIC Financial Advisers Register. You can search for a registered adviser near you on this directory, which is updated weekly from the ASIC register and shows each adviser's current authorisations, qualifications and disciplinary history.

Advisers are listed across New South Wales, Victoria, Queensland, South Australia, Western Australia and all other states and territories.