Once you've decided to operate under an existing AFSL rather than holding your own, a second decision follows quickly: whose. It's easy to treat this as a formality — find a licensee, get authorised, get on with it. It isn't. When you operate as an authorised representative, the licensee authorises your services, supervises your conduct, and, if you're running a fund, may be the trustee that holds your investors' assets. That's not a vendor relationship. It's a foundation.
Choosing a licensee to operate under comes down to a handful of things: does their authorisation scope actually cover the services and clients you want; how do they supervise and monitor authorised representatives; can they also act as trustee and issuer if you're running a scheme, or only authorise you; how is the cost structured; how fast can they onboard you; and what happens to your clients and track record if you leave. Get the authorised representative agreement in writing and read it before you commit. The biggest red flag of all is a licensee that isn't interested in supervising you — because genuine oversight is exactly what the law requires of them.
Why the choice of licensee matters
Operating under an existing AFSL means your financial services authorisation sits with someone else. As an authorised representative, you build and run your own offering, brand and client relationships — but the licensee authorises the services you provide and is responsible for monitoring and supervising your conduct. If you're running a wholesale fund, the picture goes further: a corporate authorised representative can't itself operate a managed investment scheme, so the licensee typically also acts as trustee and issuer of the scheme.
Put plainly: the licensee you choose holds the authorisation your business runs on, and may hold legal title to your investors' assets. Choosing well is worth more than a fast quote.
What to look for
1. Authorisation scope that actually fits
The single most important question: do the licensee's authorisations cover the services you want to provide, to the clients you want to serve? An AFSL is authorised for specific things — particular financial products, particular services (advice, dealing, scheme operation), and particular client types. If your market is wholesale clients, the licence needs wholesale authorisations. A licensee whose scope doesn't clearly cover what you do isn't a fit, however attractive the rest looks.
2. Real supervision and compliance monitoring
Under the law, a licensee is responsible for monitoring and supervising its authorised representatives — that's not optional, and it's not paperwork. Ask how it works in practice: what monitoring cadence, what reporting, what compliance framework you'll operate within, how breaches are handled. A licensee that takes supervision seriously is protecting you as much as itself. One that waves it away is a warning sign, not a convenience.
3. The trustee and issuer question
This is where funds differ from advice. If you're launching a wholesale scheme, authorisation alone isn't enough — someone licensed has to be the trustee and issuer of the scheme, holding the assets and issuing the interests. Some licensees only authorise representatives; others can also provide the trustee and scheme infrastructure. If you need the latter, confirm the licensee can actually do it, rather than discovering the gap after you've signed. → Managed Scheme & Trustee Infrastructure
4. A cost structure you can understand
Fees vary widely, and so does how they're presented. Look for a structure you can actually model: what's the engagement fee, what's ongoing, what scales with funds under management or activity, and what's charged separately. A fixed engagement fee is easier to plan around than an open-ended arrangement. What matters most is that you can see the whole picture before you commit — not that the headline number is lowest.
5. Onboarding speed
One of the main reasons to operate under an existing licence is speed to market — weeks rather than the many months of your own AFSL application. A good licensee has a defined onboarding process and can tell you realistically how long it takes. If onboarding is vague or slow, you're giving back the very advantage you came for.
6. Regulatory standing and track record
You're borrowing the licensee's licence and reputation. It's reasonable to understand their standing: how long they've held the licence, their experience with representatives like you, and whether they operate the kind of governance you'd want associated with your fund. You can confirm a licence and its authorised representatives on ASIC's professional registers.
7. A clean exit
Operating under a licence is often a stepping stone — many managers move to their own AFSL as they scale. Ask the awkward question early: if the relationship ends, what happens to your clients, your scheme and your track record? A licensee confident in the relationship will have a clear answer. The time to understand the exit is before the entry.
The questions to ask — a checklist
Take these to any prospective licensee, and get the answers in writing:
- What specific authorisations would I be appointed under, and do they cover my services and my client type?
- How do supervision and compliance monitoring work in practice?
- Can you act as trustee and issuer of my scheme, or only authorise me?
- What are the fees, and how do they scale?
- How long does onboarding take, start to finish?
- Is professional indemnity insurance my responsibility? (It usually is.)
- Can I see the authorised representative agreement before I commit?
- If I leave, what happens to my clients, my scheme and my track record?
The red flags
| Red flag | Why it matters |
|---|---|
| "You can operate however you like" | The law requires the licensee to supervise you. No oversight means they're not meeting their obligations — and your authorisation may not be worth much. |
| Authorisation scope is vague | If it isn't clearly confirmed that the licence covers your services and clients, you may be operating outside scope without knowing it. |
| Fees you can't pin down | Open-ended or opaque pricing is hard to plan around and often gets more expensive as you grow. |
| Won't show the agreement | The authorised representative agreement defines the whole relationship. Reluctance to share it before signing is telling. |
| Can't be trustee, but you need one | For a fund, authorisation without the trustee and issuer layer leaves a gap you'll have to fill elsewhere — at extra cost and delay. |
| No clear exit | If they can't explain what happens to your clients and scheme when you leave, that's a relationship built to be hard to exit. |
Dealer group, broker network, or licensing platform?
These terms get used loosely, and the differences matter for what you need.
A dealer group or broker network typically authorises advisers or brokers to provide advice or dealing services under its licence — a well-established model in financial advice and broking. If that's your business, it may be exactly right.
A licensing platform built for wholesale funds does more than authorise you. It also provides the trustee, issuer and scheme infrastructure a fund manager needs — the layer that lets a pooled wholesale vehicle actually operate. If you're launching a wholesale fund rather than only advising or broking, authorisation alone won't get you there; you generally need the scheme layer too.
The right choice isn't "which is best" — it's "which fits what you're actually building".
Where Providence fits
To be upfront: Providence Equity Holdings is an AFSL licensee, so we're one of the options a guide like this describes. We've written it to be useful whether or not you talk to us — the questions above are the ones worth asking of anyone.
Where we're built to fit is the wholesale fund case specifically. Providence Equity Holdings can act as trustee, issuer and operator of the scheme and provide the compliance and operational framework, while onboarding you as an authorised representative to run the strategy — on a fixed engagement fee. That combination of authorisation and the trustee and scheme layer is the part many licensees don't offer. If that's what you're building, we'd welcome the conversation. If it isn't, use the checklist anyway. → Authorised Representative Onboarding
Frequently asked questions
What does it mean to operate under an AFSL?
It means providing your financial services under a licence held by someone else, rather than holding your own. You're appointed as an authorised representative of the licensee. The licensee authorises the services you provide and is responsible for monitoring and supervising your conduct, while you run your own business. You don't hold or control the licence — so the licensee you choose matters.
What should I look for in an AFSL licensee?
Check that the licensee's authorisations actually cover the services you want to provide, and extend to wholesale clients if that's your market. Look at how they supervise and monitor authorised representatives, whether they can also act as trustee and issuer if you're running a scheme, how their fees are structured, how quickly they can onboard you, and their regulatory standing. Ask to see the authorised representative agreement before you commit.
What questions should I ask a prospective licensee?
Ask what specific authorisations you'd be appointed under and whether they cover your services and clients; how supervision and compliance monitoring work in practice; whether the licensee can act as trustee and issuer of your scheme or only authorise you; what the fees are and how they scale; how long onboarding takes; what happens to your clients and track record if the relationship ends; and whether professional indemnity insurance is your responsibility. Get the answers in writing.
What are the red flags when choosing a licensee?
Warning signs include an authorisation scope that doesn't clearly cover your services, vague or absent supervision arrangements, fees that are hard to pin down, reluctance to show you the authorised representative agreement, an inability to act as trustee where your fund needs one, and any suggestion that you can operate however you like without oversight. Genuine licensees supervise their authorised representatives — because the law requires it.
Is a dealer group or broker network the same as a licensing platform?
They overlap but aren't identical. A dealer group or broker network typically authorises advisers or brokers to provide advice or dealing services under its licence. A licensing platform built for wholesale funds also provides the trustee, issuer and scheme infrastructure a fund manager needs — not just the authorisation. If you're launching a wholesale fund rather than only advising, you generally need the trustee and scheme layer as well as the authorisation.
Can I move to my own AFSL later?
Yes. Operating under an existing licence is a common stepping stone. Many managers build a track record as an authorised representative and apply for their own AFSL as they scale. When choosing a licensee, it's worth understanding up front what happens to your clients, your scheme and your track record if and when you transition — so the exit is as clean as the entry.
Related reading: Own AFSL vs authorised representative — whether to operate under a licence at all. What does it cost to set up a wholesale fund? And how to set one up, step by step.
Sources & further reading (ASIC)
This page draws on guidance published by ASIC. For the authoritative position, see:
- ASIC professional registers — confirm a licence, its authorisations, and its authorised representatives
- Authorised representatives — ASIC on the licensee's responsibility to supervise its representatives
- What is an AFS licence? — how authorisations define what a licensee can do
ASIC guidance is general and doesn't address your circumstances — confirm how it applies to you with your own adviser.