ASIC financial adviser exam, Licensing, authorised representatives and professional standards question: word independent

ASIC examLicensing, authorised representatives and professional standards

Tessa, a relevant provider at Brightwater Advice, charges every client a flat annual fee and receives no commissions. Brightwater, her licensee, receives payments from a fund manager calculated on the amount of client money its advisers place in that manager's funds. Tessa wants her website to call her an 'independent financial adviser'. May she use the word 'independent'?

A Yes: she personally receives only flat fees from her own clients
B No: her licensee receives volume-based payments
C No: she would need to hold her own AFS licence to use it
D Yes, provided her FSG discloses the fund manager's payments clearly

Show the answer and explanation

Answer: B. No: her licensee receives volume-based payments

Section 923A of the Corporations Act 2001 (compilation 19 Sep 2026) restricts 'independent', 'impartial' and 'unbiased'. The exception in s923A(2) applies only if neither the adviser nor, among others, the person on whose behalf she provides the service (s923A(2)(b)(ii), here Brightwater) receives commissions, volume-based remuneration from a product issuer, or other issuer benefits that could influence them. Brightwater's payments are volume-based, so Tessa cannot use the word. Her own flat fees are only half of the test. Holding her own licence is not a condition of s923A. Disclosure does not cure it: her FSG must instead state that she is not independent and why (s942B(2)(fa)).

Common mistake

Looking only at the adviser's own pay misses that s923A(2)(b) also looks at her licensee.

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