Section 917B Explained: When a Licensee Is Liable for Its Representative's Advice
6 min read · facts checked 28 Oct 2026
As at 28 October 2026, section 917B of the Corporations Act says that if a representative acts for only one AFS licensee, that licensee is responsible, as between itself and the client, for the representative's conduct, whether or not the conduct was within authority. It sits in Part 7.6, Division 6 (ss 917A–917F), which ASIC's exam reading list includes as "Liability of financial services licensees for representatives" (Exam preparation guidance v6.0, September 2026).
When Division 6 applies
- It covers a representative's conduct that relates to a financial service, that a client could reasonably be expected to rely on, and that the client in fact relied on in good faith (s 917A(1)).
- A licensee's representatives include its authorised representatives, its employees and directors, those of a related body corporate, and anyone else acting on its behalf (s 9).
- "Within authority" means within the scope of employment for an employee, within a director's duties for a director, and otherwise within the authority the licensee gave (s 917A(2)).
The four rules
| Section | Situation | Who is responsible to the client |
|---|---|---|
| 917B | The representative acts for only one licensee | That licensee, whether or not the conduct was within authority |
| 917C(2) | The representative acts for several licensees, but only one covers this class of service | That licensee, whether or not the conduct was within authority |
| 917C(3) | Several licensees cover the class of service, the conduct relates to certain prescribed insurance products (such as motor vehicle, home building and home contents insurance), and it was within authority for one or more of them | The licensee it was within authority for, or those licensees jointly and severally |
| 917C(4) | Any other case with several licensees | All of them, jointly and severally, whether or not the conduct was within authority |
The one way out: disclosure
A licensee is not responsible under ss 917B or 917C only if the conduct was outside authority (for every licensee, if there were several), the representative disclosed that before the client relied on the conduct, and the disclosure was as clear and prominent as a person would reasonably need to decide whether to acquire the service (s 917D). Separately, no one may hold out that conduct is within a licensee's authority when it is not (s 911C(d)).
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What responsibility means
- The licensee is liable for the client's loss or damage caused by the conduct (s 917E), and the client has the same remedies against the licensee as against the representative (s 917F(1)).
- The licensee and the representative are jointly and severally liable (s 917F(2)), so the client can recover from either, and the representative's own liability remains (s 917F(4)).
- An agreement is void to the extent it tries to alter or restrict ss 917B–917E, and a licensee must not make or offer one (s 917F(5) and (7)). An indemnity from the representative to the licensee is allowed (s 917F(6)).
- Division 6 creates liability to the client only. It imposes no criminal responsibility and no other civil liability that would not otherwise apply (s 917F(3)).
How s 917B differs from the licensee's other duties
| Rule | What it does |
|---|---|
| s 917B | Makes the licensee answerable to the client for the loss: a compensation route |
| s 912A(1)(ca) | Requires the licensee to take reasonable steps to ensure its representatives comply with the financial services laws |
| s 961L | Requires reasonable steps to ensure representatives comply with the best interests duty and related obligations (a civil penalty provision) |
| s 961K(2) | Makes the licensee contravene a civil penalty provision when a representative who is not an authorised representative breaches ss 961B, 961G, 961H or 961J |
| s 916C | Allows one person to be an authorised representative of two or more licensees only if each consents, or in limited other cases |
Worked example
Original example, not an exam question. Sana is an authorised representative of one licensee, Bluegum Advice, authorised to advise on super and life insurance only. Without saying it is outside her authority, she recommends that a retail client put A$80,000 into an unlisted property syndicate. The syndicate fails and the client loses most of the money.
- Is Bluegum responsible? Yes. Sana acts only for Bluegum, so s 917B applies whether or not she acted within authority, and s 917E extends this to the client's loss.
- Could Bluegum escape? Only if Sana had clearly and prominently told the client, before the client relied on the advice, that it was outside her authority (s 917D). She did not.
- Can the client go after Sana instead? Yes. Both are jointly and severally liable (s 917F(2)), and Bluegum may recover from Sana under an indemnity in their agreement (s 917F(6)).
- Anything else for Bluegum? Whether it took reasonable steps to supervise Sana is a separate question under s 912A(1)(ca), and a significant breach may need a report to ASIC (see breach reporting).
Traps the exam sets
- "The advice was outside her authorisation, so the licensee is not liable." For a representative of only one licensee, s 917B applies whether or not the conduct was within authority.
- "The client must sue the representative first." No. Liability is joint and several (s 917F(2)).
- "The licensee supervised well, so it is not responsible." Good supervision is not a condition of s 917B. It matters for the licensee's own obligations (s 912A(1)(ca)), not for its responsibility to the client.
- "The authorisation agreement puts all liability to clients on the representative." Void to that extent (s 917F(5)), though an indemnity between them is allowed (s 917F(6)).
- "Section 917B decides who gave a provisional relevant provider's advice." No. Section 921F(5) treats that advice as given by each of the supervisors.
Quick check
3 questionsAnswer each one before you tap to see the answer and why. All are from the practice bank.
- 1mediumScenario
Priya, 38, is an authorised representative of only one AFS licensee, Harbour Wealth, and her written authorisation covers superannuation and managed funds. Without telling Harbour Wealth, she recommends that Mr Lam, 67, invest A$90,000 in a portfolio of small-company shares, which her authorisation does not cover. She never tells him so. The shares fall 40%. As between Harbour Wealth and Mr Lam, Harbour Wealth is BEST described as…
- A not responsible: the advice was outside Priya's written authorisation
- B responsible for Priya's conduct even though it was outside her authority
- C liable as a guarantor once Mr Lam has first exhausted a claim against Priya
- D responsible only if it failed to supervise Priya; otherwise the loss rests with her
Show the answer
Answer: B. responsible for Priya's conduct even though it was outside her authority
Answer: responsible for Priya's conduct even though it was outside her authority. Priya represents only Harbour Wealth, so under s917B it is responsible, as between it and Mr Lam, for her conduct whether or not it was within authority, and s917E extends that to his loss.Why not the others:• not responsible: the advice was outside Priya's written authorisation: acting outside authority is the very case s917B covers, and the only escape, a clear and prominent s917D disclosure, was never made.• liable as a guarantor once Mr Lam has first exhausted…: Harbour Wealth and Priya are jointly and severally liable (s917F(2)), so Mr Lam need not pursue Priya first.• responsible only if it failed to supervise Priya…: good supervision is not a condition of s917B; a well-supervised licensee is still responsible, though it may seek an indemnity from Priya (s917F(6)).Rule: A sole licensee is responsible to the client for its representative's conduct, within authority or not, unless the lack of authority was clearly and prominently disclosed before the client relied on it (ss917B, 917D).Source: Corporations Act 2001 (Cth) ss917B, 917D, 917E, 917F (compilation No. 149, 19 Sep 2026)
- 2mediumScenario
Ruth is an authorised representative of Quokka Advice. She wants to advise for a second licensee, Marri Wealth, on life insurance as well. Quokka's managing director dislikes the plan and asks what the Act allows. Under Part 7.6 of the Corporations Act … (i) Quokka may revoke Ruth's authorisation at any time by written notice to her. (ii) Ruth may be an authorised representative of both licensees if each licensee consents.
- A (i) True, (ii) True
- B (i) True, (ii) False
- C (i) False, (ii) True
- D (i) False, (ii) False
Show the answer
Answer: A. (i) True, (ii) True
Answer: (i) True, (ii) True. Quokka can end Ruth's authorisation by written notice, and she can represent two licensees if each consents.(i) True. Section 916A(4) lets a licensee revoke an authorisation at any time by giving written notice to the representative, so Quokka's managing director has that power whatever Ruth plans.(ii) True. Section 916C(1)(a) permits a person to be an authorised representative of 2 or more licensees where each consents to her also representing the others; without those consents the second authorisation is void (s916C(2)), so Ruth's plan depends on both Quokka and Marri Wealth agreeing.Rule: A licensee may revoke an authorisation at any time by written notice, and an authorised representative may act for several licensees only with each licensee's consent (or in the other s916C(1) cases); where both consent, s917C allocates responsibility for her conduct between them.Source: Corporations Act 2001 (Cth) ss916A(4), 916C, 917C (compilation No. 149, 19 Sep 2026)
- 3hardScenario
Ravi, a provisional relevant provider at Kingfisher Advice, is supervised by two relevant providers, Alana and Ben. At a meeting that Ben attends but Alana does not, Ravi gives Mr Osei, a retail client, oral personal advice to switch A$120,000 into a different managed fund. For the purposes of the Corporations Act, that advice is taken to have been provided by…
- A Ravi alone: he gave the advice and he is a relevant provider
- B Kingfisher, which is deemed to give the advice of its provisional providers
- C Ravi together with Ben, the supervisor who attended
- D each person who is Ravi's supervisor when the advice is given
Show the answer
Answer: D. each person who is Ravi's supervisor when the advice is given
Answer: each person who is Ravi's supervisor when the advice is given. Personal advice a provisional relevant provider gives a retail client about a relevant financial product is taken to have been given by each person who is then a supervisor, instead of by the provisional relevant provider, so it is Alana's and Ben's whether or not Alana was in the room.Why not the others:• Ravi alone: he gave the advice and he is a relevant provider: Ravi spoke, but the deeming rule moves the advice away from him.• Kingfisher, which is deemed to give the advice…: Kingfisher may be responsible to Mr Osei for its representatives' conduct under s917B, but that is a different rule from who is taken to have advised.• Ravi together with Ben, the supervisor who attended: attendance at the meeting is not the test, and Ravi is replaced, not joined.Rule: Under s921F(5), personal advice by a provisional relevant provider to a retail client is taken to be given by every current supervisor, which is why s921F(6) requires clients to be told each supervisor's name.Source: Corporations Act 2001 (Cth) ss917B, 921F (compilation No. 149, 19 Sep 2026)
Our study notes cover AFS licensees and authorised representatives and licensing and professional standards. Our free financial adviser practice exam is a timed mock of 20 original questions in 30 minutes across all three areas, mostly on client scenarios. You can try 5 questions with no sign-up, each marked with a worked answer; the full timed mock needs a free account.
Sources (checked 28 Oct 2026)
- Corporations Act 2001 (Cth), Pt 7.6 Div 6 (ss 917A–917F) and ss 9, 911C, 912A, 916C, 921F, 961K and 961L (Compilation No. 149, 19 September 2026)
- Corporations Regulations 2001, reg 7.1.04CA (Compilation No. 214, 1 September 2026)
- ASIC RG 175 AFS licensing: Financial product advisers—Conduct and disclosure (November 2024)
- ASIC: Financial adviser exam: Exam preparation guidance, version 6.0 (September 2026)
Adviser Exam Prep is an independent study aid for candidates sitting the financial adviser exam. It is not affiliated with, endorsed by or connected to the Australian Securities and Investments Commission (ASIC), the exam's administrator or any AFS licensee. "ASIC" is used only to describe the exam. All questions are original practice material, not past or live exam questions, and nothing on this site is financial advice.
Frequently asked questions
What does section 917B of the Corporations Act say?
If a representative acts for only one AFS licensee, that licensee is responsible, as between itself and the client, for the representative's conduct, whether or not the conduct was within authority (s 917B, Compilation No. 149, 19 September 2026).
Can a licensee avoid liability for a representative acting outside authority?
Only under s 917D: the conduct was outside authority, the representative told the client so before the client relied on it, and the disclosure was as clear and prominent as a person would reasonably need to decide whether to acquire the service.
Is the representative still liable as well?
Yes. The licensee and the representative are jointly and severally liable to the client (s 917F(2)), and an agreement for the representative to indemnify the licensee is allowed (s 917F(6)).
More guides
- ASIC Breach Reporting for Financial Advisers: Reportable Situations, Deadlines and Reporting Other Advisers
- ASIC RG 175 Explained: Conduct and Disclosure Rules for Financial Advisers
- The Best Interest Duty (s 961B) and the Safe Harbour Steps, Explained for the Exam
- ASIC Financial Adviser Requirements: Who Must Sit the Exam, and When
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