There are two exemptions to being authorised under an ACL, or
holding an ACL, which will allow you to refer clients to a
licensee: a basic exemption and an expanded exemption.
The basic exemption allows you to provide your client with
information about how they can contact a licensee that is able to
provide credit activities; for example, a finance broker or a
credit provider. At the same time, you must disclose to the client
any benefits that you may receive from the licensee for making the
referral. This is fairly straightforward and you may be already
The expanded exemption allows you to pass on your client's
contact details to a licensee. To do this you are required to do
have an agreement in place between you and the licensee;
have the client's consent to have their name and contact
details provided to the licensee;
provide the licensee with the client's name and contact
details within 5 business days;
disclose to the client any benefits that you may receive from
the licensee for making the referral; and
not charge the client a fee for the referral.
You cannot rely on the expanded exemption if your principal
business is referrals. There are additional obligations on the
licensee when the expanded exemption is used.
Option 4: Avoid providing credit assistance
After doing a bit of research you may decide that credit
assistance is not something that your business is interested
Here are some tips to avoid unintentionally being caught by the
Keep any discussions about credit generic. Yes, you can talk
about the benefits and disadvantages of a class of credit product.
Avoid talking about any particular credit provider. Do not mention
particular credit products. If you start telling your client that
ANZ's simplicity plus home loan would be great for them (or
they should retain that particular product), you have crossed the
line and need to be operating under a credit licence.
If a client comes to you for help filling out an application
for a loan for an investment property, politely decline and refer
them to a broker or the credit provider. Although it is called
credit assistance it is easy to focus on the advice aspect and
forget that assisting someone to apply for credit is also
As soon as any client starts mentioning credit, stop them and
say "I can't help you with that but I know a great broker
who can. Can I give you their details?" Immediately referring
your client to someone who is authorised to provide credit
assistance keeps you out of trouble and ensures that your client
will get help from someone who knows what they are talking
In your Statement of Advice, state that your advice does not
involve any suggestion that they enter into, remain in or increase
the credit limit of a particular credit contract with a particular
credit provider. If assistance is required in any such matters,
they should seek assistance from an appropriately licensed or
A final word
From time to time we see licensing requirements driving an
organisation's business model. This seems to us to be the wrong
way around. Surely, it is better to identify business goals and
develop strategies to achieve those goals. These strategies will
include consideration as to whether an ACL is necessary, desirable
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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