An AFSL Holder’s Guide to ASIC’s FSG & Website Disclosure Information

Introduction

For Australian Financial Services (AFS) licensees and their authorised representatives, the Financial Services Guide (FSG) is a critical disclosure document when providing a financial service to a retail client. Mandated by the Corporations Act 2001 (Cth), its purpose is to equip clients with key information about the services offered, remuneration structures, and dispute resolution processes, enabling them to make an informed decision about whether to use those services.

With the commencement of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (Cth), financial advisers now have the option to meet these obligations by making the required information publicly available on their website. This guide provides essential information on both traditional FSG requirements and the new rules for website disclosure information, ensuring licensees and their representatives can effectively manage their compliance duties.

What is a Financial Services Guide?

The Purpose of an FSG

An FSG is a mandatory disclosure document that AFS licensees and their authorised representatives must provide to retail clients. Its primary purpose is to equip clients with essential information before they receive a financial service, allowing them to make an informed decision about whether to engage the provider.

The core function of the FSG is to clearly communicate key details about the financial services relationship. According to the Corporations Act 2001 (Cth), this document must explain:

Component	Explanation
Who the provider is	Includes the provider’s name, contact details, and their AFS licence number or Authorised Representative number.
What services are offered	Details the specific financial services and the types of financial products the provider is authorised to advise on.
How the provider is paid	Outlines all forms of remuneration, such as fees, commissions, and any other benefits that could influence the advice provided.
How to make a complaint	Provides information on the internal and external dispute resolution processes, including details for the Australian Financial Complaints Authority (AFCA).

Building Client Trust with Your FSG

The FSG is a fundamental tool for establishing transparency and building trust from the outset of a client relationship. By providing clear and comprehensive information upfront, it ensures clients understand the nature of the financial services they are considering. This transparency helps to manage expectations and fosters a sense of confidence.

Furthermore, the FSG demonstrates a provider’s commitment to operating with integrity and in the client’s best interests. Disclosures around the following elements are crucial for this purpose:

• Remuneration structures
• Potential conflicts of interest
• Associations with product issuers

For example, if an adviser cannot legally describe themselves as ‘independent’ due to receiving commissions, this must be clearly stated in the FSG. This level of honesty helps build a strong foundation for a long-term, trust-based professional relationship.

Your Mandatory FSG Content Checklist

Provider Details & Authorisation

Your FSG or website disclosure information must clearly identify who is providing the financial service. This ensures clients know exactly who they are dealing with from the outset.

The following details are mandatory:

Requirement	Description
Title and Date	An FSG document must be titled ‘Financial Services Guide’ near the front. Both FSGs and website disclosures must include the date of preparation or last update.
Purpose Statement	A prominent statement explaining that the disclosure is designed to help the client decide whether to use the services and contains key information.
Entity Details	Must include the provider’s name, contact details, and either the AFS licence number or the Authorised Representative number.
Authorised Representative Details	If applicable, the FSG must state the name, contact details, and AFS licence number of the authorising licensee(s).

Services & Financial Products

The FSG must give clients a clear picture of the services you offer. It needs to contain information about the specific financial services the entity is authorised to provide under its licence.

Additionally, it must detail the kinds of financial products that these services relate to. This helps clients assess whether your offerings align with their needs.

Remuneration, Commissions & Other Benefits

Transparency around how you are paid is a critical component of the FSG. You must disclose information about all remuneration, including commissions and other benefits, that might influence the service you provide. This disclosure must cover payments received by the providing entity and certain related parties, such as related bodies corporate, directors, and employees.

The specific disclosure requirements depend on whether the remuneration is known at the time of disclosure:

Remuneration Scenario	Disclosure Requirement
Ascertainable Amounts	If the remuneration amount is known when the FSG is given, that specific amount must be disclosed.
Amounts Not Ascertainable (Personal Advice)	Provide particulars of the remuneration (e.g., ranges, rates, calculation method) and state that the specific calculation will be disclosed when advice is given.
Amounts Not Ascertainable (No Personal Advice)	Provide particulars of the calculation method, along with a statement that the client may request details within a reasonable time before the service is provided.

This includes disclosing upfront and trailing commissions, “soft” dollar benefits, and any payments received for referring a client to another person or entity.

Associations, Relationships & Independence Disclosure

To manage potential conflicts of interest, your FSG must disclose any associations or relationships with issuers of financial products that could reasonably be expected to influence the advice you provide. This applies to relationships held by the providing entity, its related bodies corporate, and, in the case of an authorised representative, the authorising licensee.

Additionally, if you provide personal advice and are not considered “independent,” “impartial,” or “unbiased” under section 923A of the Corporations Act 2001 (Cth), you must include a specific disclosure. This situation can arise if you receive commissions on life insurance products, for example.

The disclosure must meet strict formatting rules:

• It must appear in a prominent position, such as on the first substantive page of the FSG.
• It must be presented inside a box.
• It must have a bold heading that includes a phrase like ‘Not Independent’ or ‘Lack of independence’.
• The font size must be at least the same as the main text and cannot be in a footnote.

Dispute Resolution & Compensation Arrangements

Your FSG must inform clients about the processes in place to handle complaints and provide compensation if something goes wrong. This involves detailing two key areas.

First, you must provide information about your dispute resolution system. This includes explaining the process for your internal dispute resolution (IDR) system and how clients can access it. You must also provide details for the external dispute resolution scheme, AFCA.

Second, the FSG must describe the compensation arrangements you have in place for retail clients. This typically involves detailing your professional indemnity insurance, which is designed to compensate clients for losses they may suffer due to a breach of your obligations under Chapter 7 of the Corporations Act 2001 (Cth).

The Authorised Representative FSG Explained

Disclosing the Licensee Relationship

When considering what is an authorised representative, it is important to know that when one provides an FSG, it must clearly disclose the relationship with the AFS licensee that authorises them. This transparency ensures clients understand who is ultimately responsible for the financial service being provided.

An authorised representative’s FSG must include details about their authorising licensee or licensees, such as:

• The licensee’s full name and contact details
• The licensee’s unique AFS licence number
• A clear statement confirming that the provider is an authorised representative of that specific licensee

Licensee Responsibility & Oversight

The authorising AFS licensee holds an overarching responsibility to ensure its representatives comply with all financial services laws, a process often managed with the guidance of specialist AFSL lawyers. This includes the obligation to prepare and provide a compliant FSG or make website disclosure information available to retail clients.

Under the Corporations Act 2001 (Cth), the licensee must take reasonable steps to ensure its representatives adhere to these requirements. Consequently, an authorised representative must have specific authorisation from their licensee before they can distribute an FSG or make website disclosure information available on their website.

Additionally, the licensee must authorise any updates or material alterations to this information to maintain compliance with regulatory standards.

Best Practices for an Effective FSG & Website Disclosure

Clear, Concise & Effective Disclosures

Under the Corporations Act 2001 (Cth), both an FSG and any website disclosure information must be worded and presented in a clear, concise, and effective manner. This legal requirement is crucial for ensuring that retail clients can understand the information and make informed decisions about whether to use your financial services.

ASIC encourages licensees to conduct consumer testing to verify that their disclosures meet this standard. To improve comprehension and meet your obligations, consider the following presentation tools:

Presentation Tool	Recommended Application
Logical Structure	Organise information with a logical sequence, group related topics, and use a table of contents to help clients navigate the document.
Plain Language	Avoid legal or industry jargon. If technical terms are necessary, explain their meaning in simple, plain English.
Visual Aids	Use headings, tables, and graphs to break up text and present complex information, such as remuneration structures, in an understandable way.
Client Focus	Tailor the disclosure to the client, avoid irrelevant generic material, and consider using an executive summary to highlight key information.

Digital Delivery & Best Practices

An FSG can be provided to a client electronically, and the new website disclosure information model relies entirely on digital access. When delivering disclosures digitally, it is important to ensure the method is effective and meets good practice standards.

There are several ways to provide disclosures digitally:

• Sending the document to an electronic address, such as an email, that the client has nominated.
• Making the information available in a manner the client has agreed to.
• Publishing the disclosure digitally and notifying the client that it is available, provided they have been given an opportunity to opt out of this method.

When using website disclosure information or other digital methods, good practice includes making sure the information is easy to retrieve, view, and understand. You should also notify clients that the website disclosure information is available, for example, by including a link to the relevant webpage in your email correspondence. This ensures clients know where to find the essential details about your financial service.

Conclusion

The FSG is a mandatory disclosure document under the Corporations Act 2001 (Cth), designed to provide retail clients with essential information about a financial service provider, including their services, remuneration, and complaints processes. Recent reforms now allow this obligation to be met through website disclosure information, but the core requirement remains to present this information in a clear, concise, and effective manner to build client trust.

To ensure your disclosure documents meet these stringent requirements and effectively manage your compliance duties, contact our expert AFSL lawyers at AFSL House today. Our team specialises in providing tailored compliance frameworks and expert guidance, helping you turn regulatory challenges into strategic opportunities.

Frequently Asked Questions (FAQ)