What is a Financial Counsellor?

Financial Counsellors: Information, support and advocacy for people in financial difficulty.

Financial Counsellors offer their services free of charge to their clients and provide impartial advocacy.

Financial Counsellors are employed by Non-Government agencies, specialising in Low Income Support, Indigenous service and advocacy, Problem Gambling service, Multicultural service, Families, Community Education, Federal and State advocacy, Credit Reform and more. These agencies have ASIC exemption from the requirement to hold a credit licence.

The Australian Securities and Investments Commission operates two licensing schemes that apply to people and organisations providing advice about financial products or credit:

1. Australian financial services licence

  • Required to operate a business giving advice about financial products.
  • Imposed by the Corporations Act 2001

2. Australian credit licence

  • Required to provide credit services.
  • Imposed by the National Consumer Credit Protection Act 2009

Financial counsellors are not the same as financial planners or credit service providers, but they sometimes provide advice about financial products or credit.

However, they are exempt from licensing requirements when these activities are part of a free, confidential and independent counselling and advocacy service that helps people in financial difficulty.

It's important to note that these exemptions are subject to strict conditions.


Exemption from an Australian financial services licence

In 2003, the Australian Securities and Investment Commission made a Class Order [CO3/1063] that provided that financial counselling agencies are exempt from the requirement to hold an Australian financial services licence. This class order was updated to be Legislative Instrument 2017/792 in 2017. This exemption means that financial counsellors can give financial product advice as part of a financial counselling service without a licence, as long as the financial counselling agency:

  • doesn't charge any fees or receive any remuneration arising from the financial counselling service
  • doesn't run, and isn't associated with, a financial services business
  • ensures its staff don't provide any financial product advice outside the terms of the exemption
  • ensures its financial counsellors are a member of, or eligible for membership of, a financial counselling association; and
  • ensures its financial counsellors have appropriate training and adequate skills and knowledge


Exemption from an Australian credit licence

The National Consumer Credit Protection Regulations 2010 provide that financial counselling agencies are exempt from the requirement to hold a credit licence. This means that financial counsellors can provide advice about credit without a licence, as long as the agency:

  • doesn't charge any fees or receive any remuneration arising from the financial counselling service
  • ensures that the agency and its staff don't provide any other credit activity outside the terms of the exemption
  • ensures its financial counsellors are a member of, or eligible for membership of, a financial counselling association; and
  • ensures its financial counsellors have appropriate training and adequate skills and knowledge


Restriction on the use of the terms "financial counsellor" and "financial counselling"

The National Consumer Credit Protection Act 2009 restricts the use of the terms, "financial counsellor" and "financial counselling" and similar terms of similar meaning. The restriction means that only financial counselling agencies who meet the exemption from an Australian Credit Licence can use the restricted terms.

Financial counsellors provide free, confidential and independent services. The purpose of the restriction is to ensure that Credit Licence holders who are not financial counsellors do not mislead people by representing their services as financial counselling (when they are not).

 

You can read more the facts about the need for financial
counselling across Australia by clicking on the button above

You can read more about Financial Counselling in these case studies
- click on button above

What is the ASIC exemption and how does it apply to an agency and to a financial counsellor?

SAFCA Members are required to practice within the national  Code of Ethical Practice and Code of Practice
SAFCA will deal with any complaints against a financial counsellor in accordance wit the Disciplinary Process Policy and Procedures

Agencies employing financial counsellors abide by the Agency Practice Standards and checklist

SAFCA does not provide financial counselling or advice.

Find a Free Financial Counsellor in your area

SAFCA

Suite 7 Wellington Centre, 2 Portrush Rd.
Payneham SA 5070