top of page
  • hello50625

The Advantages of Becoming a Corporate Authorised Representative


The Advantages of Becoming a Corporate Authorised Representative
The Advantages of Becoming a Corporate Authorised Representative

In the complex landscape of financial services, navigating regulatory requirements and ensuring compliance can be overwhelming. For many businesses, the decision to become a Corporate Authorised Representative (CAR) under an existing Australian Financial Services Licence (AFSL) holder like 62 Consulting offers a strategic advantage. This blog focuses on why aligning with an AFSL holder can be more beneficial than obtaining your own AFSL, highlighting key factors such as:

  • speed to market,

  • ability to focus on your business’ growth and revenue,

  • significant cost savings,

  • compliance management,

  • risk management support.


Faster Time to Market

One of the most compelling reasons to become a CAR is the significantly reduced time to market. Obtaining your own AFSL from the Australian Securities and Investments Commission (ASIC) can take up to 12 months due to rigorous application processes and compliance requirements. In contrast, obtaining CAR status can be achieved in just 1-2 weeks. This swift onboarding process allows businesses to start operations and serve clients much sooner, giving them a competitive edge in the fast-paced financial services industry.


Cost-Effective Solution

Financially, becoming a CAR can be a more cost-effective solution compared to obtaining and maintaining an AFSL when just starting out. The fees associated with CAR status are significantly lower than the costs incurred by AFSL holders, which include:

  • Compliance Costs: Running your own compliance or outsourcing it can be expensive. As a CAR, these costs are reduced by the AFSL holder.

  • Regulatory Capital: AFSL holders are required to hold substantial regulatory capital, which can strain financial resources.

  • Annual Auditor Fees: Maintaining an AFSL requires annual audits to ensure compliance, adding another layer of financial burden.


By becoming a CAR, businesses can allocate these saved resources to other critical areas such as business development and client services.


Compliance Management

Compliance with financial services laws is a critical aspect of operating within the industry. As a CAR, the AFSL holder is responsible for ensuring compliance, covering aspects such as licensing requirements, disclosure obligations, and record-keeping. This includes:

  • Independent Document Reviews: Offer and marketing documents are independently reviewed by the AFSL holder to ensure they meet regulatory standards, reducing legal risks.

  • Training and Competence: The AFSL holder will ensure that all representatives are appropriately trained and competent, maintaining high standards of professionalism and service quality.


This comprehensive compliance management reduces the time a CAR spends on the administrative burden and allows them to focus more on core business activities.


Risk Management and Support

Partnering with an AFSL holder like 62 Consulting provides businesses with valuable risk management advice and support. The AFSL holder can offer guidance on:

  • Managing Business Risks: Advice on managing risks within the business helps in implementing effective processes and procedures, both financially and operationally.

  • Professional Indemnity Insurance: Whilst Corporate Authorised Representatives may have to obtain their own PI insurance, individual Authorised Representatives are often covered by the AFSL holder's Professional Indemnity insurance, providing financial protection against potential claims.


This level of support ensures that businesses operate within a safe and compliant framework, mitigating potential risks and liabilities.


Focus on Business Growth

Perhaps one of the most significant benefits of becoming a CAR is the ability to focus on business growth without being bogged down by AFSL obligations and the CAR’s business can direct their attention and resources towards:

  • Client Acquisition and Retention: Building and maintaining strong client relationships.

  • Service Expansion: Exploring new services and products to meet market demands.

  • Operational Efficiency: Streamlining operations to enhance productivity, risk management and profitability.


By removing the compliance burden, businesses can operate more efficiently and effectively, driving growth and success.


Conclusion

For businesses in the financial services sector, becoming a CAR under an AFSL holder like 62 Consulting offers numerous advantages. From faster market entry and cost savings to assistance with compliance management and valuable support, the benefits are clear. By choosing this path, businesses can focus on what they do best—serving their clients and growing their business—while leaving the complexities of compliance to the experts. Partnering with 62 Consulting not only ensures regulatory adherence but also empowers businesses to thrive in a competitive market.


281 views

Recent Posts

See All

Comments


bottom of page