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The Australian Securities and Investments Commission operates two licensing schemes that apply to people and organisations providing advice about financial products or credit:

  1. Australian financial services licence
    • Required to operate a business giving advice about financial products.
    • Imposed by the Corporations Act 2001.
  2. Australian credit licence
    • Required to provide credit services.
    • Imposed by the National Consumer Credit Protection Act 2009.

Financial counsellors are not the same as financial planners or credit service providers, but they sometimes provide advice about financial products or credit.

However, they are exempt from licensing requirements when these activities are part of a freeconfidential and independent counselling and advocacy service that helps people in financial difficulty.

It’s important to note that these exemptions are subject to strict conditions.

Exemption from an Australian financial services licence

In 2003, the Australian Securities and Investment Commission made a Class Order [CO3/1063] that provided that financial counselling agencies are exempt from the requirement to hold an Australian financial services licence. This class order was updated to be Legislative Instrument 2017/792 in 2017. This exemption means that financial counsellors can give financial product advice as part of a financial counselling service without a licence, as long as the financial counselling agency:

  • doesn’t charge any fees or receive any remuneration arising from the financial counselling service
  • doesn’t run, and isn’t associated with, a financial services business
  • ensures its staff don’t provide any financial product advice outside the terms of the exemption
  • ensures its financial counsellors are a member of, or eligible for membership of, a financial counselling association; and
  • ensures its financial counsellors have appropriate training and adequate skills and knowledge.

Exemption from an Australian credit licence

The National Consumer Credit Protection Regulations 2010 provide that financial counselling agencies are exempt from the requirement to hold a credit licence. This means that financial counsellors can provide advice about credit without a licence, as long as the agency:

  • doesn’t charge any fees or receive any remuneration arising from the financial counselling service
  • ensures that the agency and its staff don’t provide any other credit activity outside the terms of the exemption
  • ensures its financial counsellors are a member of, or eligible for membership of, a financial counselling association; and
  • ensures its financial counsellors have appropriate training and adequate skills and knowledge.

Restriction on the use of the terms “financial counsellor” and "financial counselling”

The National Consumer Credit Protection Act 2009 restricts the use of the terms, “financial counsellor” and “financial counselling” and similar terms of similar meaning. The restriction means that only financial counselling agencies who meet the exemption from an Australian Credit Licence can use the restricted terms.

Financial counsellors provide free, confidential and independent services. The purpose of the restriction is to ensure that Credit Licence holders who are not financial counsellors do not mislead people by representing their services as financial counselling (when they are not). Read more about the restrictions here.

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