When managers price up applying for their own AFSL, they budget the application and forget the people. Yet responsible managers are how ASIC decides whether your business is actually competent to provide the services you're asking to be authorised for — and they're a permanent commitment, not a one-off box on the form.
A responsible manager (RM) is a person nominated to demonstrate that a licensee has the competence to provide the services on its licence. ASIC assesses organisational competence through the knowledge and skills of these people, and sets out its expectations in Regulatory Guide 105. There's no single prescribed number — the test is that your RMs cover all your authorisations — but most licensees nominate at least two so the business isn't dependent on one person. RMs must be genuinely involved in significant day-to-day decisions, not names on a form. And if you operate under an existing AFSL, this obligation sits with the licensee, not with you.
What a responsible manager actually is
An AFS licence is held by an entity — but an entity can't have knowledge or experience. So ASIC assesses the competence of the people who direct the financial services business. Those nominated people are your responsible managers.
The critical expectation: RMs are people directly responsible for significant day-to-day decisions about the ongoing provision of the licensee's financial services. That rules out the arrangement people sometimes hope for — borrowing a credential from someone with no real involvement. ASIC's expectations are set out in RG 105 AFS licensing: Organisational competence.
How competence is demonstrated
RG 105 sets out options for showing that a responsible manager has appropriate knowledge and skills. Broadly, they pair relevant industry experience with qualifications or training — for example a period of relevant experience over recent years combined with an approved qualification or assessment.
Two points matter more than the specific combination you choose:
- Relevance is to your authorisations. Experience must map to the specific financial services and products the licence covers. Twenty years in an adjacent part of financial services doesn't automatically demonstrate competence for operating a managed investment scheme.
- Coverage must be complete. Between them, your RMs need to cover everything you're authorised for. A gap in coverage is a gap in your application.
Because the options are detailed and change over time, check the current version of RG 105 rather than relying on a summary — including this one.
How many do you need?
There's no single prescribed number. The requirement is coverage: your responsible managers, collectively, must have knowledge and skills across all of your authorisations.
In practice most licensees nominate at least two, for two reasons: to cover the full scope of authorisations, and so the business isn't wholly dependent on one individual. Which leads to the cost nobody budgets for.
Can you appoint an external responsible manager?
Some licensees do. But the involvement test doesn't relax because the person is external: they must still be genuinely responsible for significant day-to-day decisions about the financial services. A nominal appointment isn't compliant, whatever the contract says.
And where an RM is external, their remuneration is a real, recurring cost — one of the items excluded from the headline "cost to get an AFSL" figure most people quote. We break that down in what it costs to set up a wholesale fund.
What this means if you operate under an existing AFSL
Here's the part that changes the calculus for most emerging managers.
The organisational competence obligation sits with the licensee. If you're appointed as an authorised representative under an existing AFSL, the responsible manager requirement is met at the licensee level — you don't nominate your own RMs, you don't carry the key person risk, and you don't pay external RM remuneration.
What stays with you: operating within your authorised scope, your own conduct and compliance, and the training and competency standards that apply to you as a representative. Operating under a licence lightens the obligation — it doesn't erase your responsibilities.
| Your own AFSL | Under an existing AFSL | |
|---|---|---|
| Nominate responsible managers | Yes — covering all authorisations | No — met at licensee level |
| Demonstrate competence to ASIC | Yes, in the application and ongoing | The licensee's obligation |
| Key person risk if an RM leaves | Yours | The licensee's |
| External RM remuneration | A recurring cost if you engage one | Not applicable |
| Your own conduct & competency | Yours | Still yours |
Responsible managers are one of the clearest practical differences between holding a licence and operating under one.
Where an integrated platform fits
Providence Equity Holdings holds the licence and carries the organisational competence obligation, including its responsible managers. You're onboarded as an authorised representative to run your strategy within an agreed scope — without nominating RMs, without the key person risk, and without the recruitment. → Authorised Representative Onboarding
Frequently asked questions
What is a responsible manager?
A responsible manager is a person nominated by an AFS licence applicant or holder to demonstrate the business has the competence to provide the financial services on its licence. ASIC assesses organisational competence through the knowledge and skills of these people, who are expected to be directly responsible for significant day-to-day decisions about the licensee's financial services. ASIC's expectations are in RG 105.
How many responsible managers do I need for an AFSL?
There's no single prescribed number. The requirement is that your responsible managers have knowledge and skills covering all the financial services and products in your authorisations. In practice most licensees nominate at least two — so the business isn't dependent on one person, and so coverage spans the full scope. The right number depends on how broad your authorisations are.
What are the responsible manager competence requirements?
RG 105 sets out options for demonstrating appropriate knowledge and skills, broadly pairing relevant industry experience with qualifications or training — for example a period of recent relevant experience together with an approved qualification or assessment. The knowledge and skills must be relevant to the specific services and products your licence covers, not general business experience. Check the current version of RG 105 rather than relying on a summary.
Do I need responsible managers if I operate under someone else's AFSL?
Not in your own right. The organisational competence obligation sits with the licensee, so if you're appointed as an authorised representative under an existing AFSL the RM requirement is met at licensee level. You remain responsible for operating within your authorised scope, for your own conduct and compliance, and for the training and competency standards that apply to you. It's one of the main reasons emerging managers operate under an existing licence.
What happens if a responsible manager leaves?
You must still be able to demonstrate competence across all your authorisations, so a departure has to be managed rather than absorbed. ASIC expects to be notified of changes to responsible managers, and a licensee that loses coverage for part of its authorisations may need to appoint a replacement or vary its licence. This key person risk is a real ongoing cost of holding your own licence.
Do responsible managers have to be employees or directors?
Not necessarily — but they must be genuinely involved. ASIC expects RMs to be directly responsible for significant day-to-day decisions about the licensee's financial services, so the role can't be a name on a form. Some licensees engage external responsible managers; where they do, the remuneration is a real recurring cost and the licensee must still show genuine involvement and oversight.
Related reading: Own AFSL vs authorised representative — where responsible managers fit in the decision. What does it cost to set up a wholesale fund? — including the costs the headline figure excludes.
Sources & further reading (ASIC)
This page draws on guidance published by ASIC. Requirements change — for the authoritative and current position, see:
- RG 105 AFS licensing: Organisational competence — the source of the responsible manager requirements and the options for demonstrating knowledge and skills
- RG 1 Applying for and varying an AFS licence — what ASIC assesses in an application
- Applying for and managing an AFS licence — including notifying ASIC of changes
ASIC guidance is general and doesn't address your circumstances — confirm how it applies to you with your own adviser.