What Does a Responsible Manager Do?

Responsible Managers play a critical role in Australian Financial Services Licence (AFSL) compliance. If you hold or are about to hold this role, understanding your duties and accountability is essential. This guide explains what ASIC expects from Responsible Managers under organisational competence requirements.

The Responsible Manager Role: An Overview

A Responsible Manager is a person named on an AFSL who is accountable for ensuring that the licensee meets its obligations under the Corporations Act and ASIC regulatory guidance. Under ASIC Regulatory Guide 105 (RG 105), ASIC assesses organisational competence by looking at whether your licence has competent people, adequate systems and effective processes in place.

As a Responsible Manager, you are the linchpin in that framework. Your role is not just about ticking compliance boxes—it's about actively overseeing the business, identifying risks, and making sure the right systems and controls are actually working in practice.

Core Duties of a Responsible Manager

Responsible Managers are expected to discharge several core duties that align with ASIC's expectations of organisational competence:

1. Understanding the AFSL and Its Authorisations

Your first duty is to know what your AFSL permits. Every AFSL comes with specific conditions and authorisations—such as the types of financial products you can deal in or advise on. As a Responsible Manager, you must understand these boundaries and ensure that your business operates within them at all times.

This means regularly reviewing your licence conditions, especially if your business model changes or you introduce new products or services. Operating outside your authorisations can lead to breaches, regulatory action, and reputational damage.

2. Establishing and Maintaining Effective Systems

ASIC expects licensees to have adequate systems to manage financial services activities. Responsible Managers are accountable for ensuring these systems are not only documented but actually implemented and functioning effectively. This includes:

• Risk management frameworks that identify, assess and mitigate operational and compliance risks
• Supervision and monitoring systems to oversee representatives and advisers
• Breach identification and reporting processes aligned with RG 78
• Complaint-handling procedures that meet regulatory standards
• Governance and decision-making structures that are clear and accountable

Your role is to regularly test and review these systems, not just rely on documented policies sitting on a shelf. ASIC reviews often look for evidence that systems are genuinely embedded in day-to-day operations.

3. Supervising and Monitoring Representatives

One of the most important aspects of the Responsible Manager role is active supervision. If your AFSL has authorised representatives or employed advisers, you are responsible for ensuring their conduct aligns with licence obligations and regulatory requirements.

Supervision is not passive. It means implementing checks such as file reviews, client feedback mechanisms, transaction monitoring, and regular training. You must be able to demonstrate that supervision is happening—not just that a supervision policy exists.

4. Identifying and Reporting Breaches

Under ASIC Regulatory Guide 78 (RG 78), licensees must report 'reportable situations' to ASIC within 30 days after first knowing, or being reckless with respect to whether, there are reasonable grounds to believe a reportable situation has arisen. As a Responsible Manager, you play a key role in:

• Identifying when a reportable situation has occurred or may have occurred
• Assessing whether a breach is deemed significant or otherwise reportable
• Ensuring reportable situations are reported to ASIC within the required timeframe
• Implementing remediation and prevention measures

Failing to identify or report reportable situations can be seen as a failure of organisational competence. For more detail on breach reporting, see our guide on breach reporting under RG 78.

5. Maintaining Competence and Knowledge

ASIC expects Responsible Managers to maintain current knowledge of regulatory obligations, industry developments, and best practices. This includes understanding changes to legislation, new ASIC guidance, and evolving compliance expectations.

Many licensees use structured training and continuing professional development (CPD) to demonstrate that Responsible Managers are staying up to date. The Clearwise AFSL Bootcamp is designed to provide practical, ASIC-aligned training that covers the core areas Responsible Managers need to understand.

Accountability and Personal Responsibility

The term "Responsible Manager" is deliberate. You are personally accountable for ensuring that compliance obligations are met. If ASIC finds systemic failures in governance, supervision, or breach reporting, Responsible Managers can face scrutiny, enforcement action, or even personal liability in serious cases.

This accountability means that you cannot simply delegate compliance responsibilities and assume everything is being handled. While you can and should delegate tasks to compliance officers and other staff, ultimate oversight responsibility remains with you.

How RG 105 Shapes the Responsible Manager Role

ASIC Regulatory Guide 105 sets out how ASIC assesses organisational competence when granting or varying an AFSL. The principles in RG 105 also apply throughout the life of the licence. Key elements include:

• Adequate human resources: Having enough competent people, including Responsible Managers, to run the business
• Adequate technology and systems: Ensuring that the licensee has the right tools and processes
• Risk management capability: Demonstrating that risks are identified, monitored and managed
• Effective supervision and training: Ensuring representatives and staff understand their obligations

Responsible Managers are central to each of these elements. ASIC expects you to be actively involved in building and maintaining organisational competence—not just overseeing it from a distance. For more on organisational competence and Responsible Manager options, see our guide on RG 105 explained.

Practical Steps for Responsible Managers

To meet your obligations effectively, consider these practical steps:

1. Review your AFSL conditions regularly: Make sure you understand what your licence permits and that the business stays within those boundaries
2. Document your governance framework: Maintain clear policies, procedures, and registers that reflect how your business operates
3. Conduct regular supervision activities: Don't wait for ASIC to ask—implement ongoing file reviews, monitoring, and representative check-ins
4. Build a breach identification process: Train staff to recognise potential breaches and establish clear escalation paths
5. Stay informed: Keep up to date with regulatory changes, ASIC guidance updates, and industry best practices through training and professional development
6. Prepare for ASIC reviews: Maintain evidence that your systems are working in practice—not just documented on paper

When You Need More Support

Many Responsible Managers, especially those stepping into the role for the first time or those running smaller AFSLs, benefit from structured training that brings together ASIC's expectations and practical guidance in one place.

The Clearwise AFSL Bootcamp is a self-paced training course specifically designed for Responsible Managers and AFSL compliance professionals. It covers AFSL obligations, governance frameworks, breach reporting, supervision, complaints, and preparing for ASIC reviews. Content is mapped to RG 78 and RG 105 and is delivered in plain English with practical examples.

Further Reading

• RG 105 Explained: Organisational Competence and Responsible Manager Options
• Breach Reporting Under RG 78: A Practical Guide for AFSL Holders
• ASIC RG 105: Licensing – Organisational Competence
• ASIC RG 78: Breach Reporting by AFS Licensees