Offshoring is here to stay! Across Australia, licensees are increasingly turning to offshore providers for paraplanning, administration, and SEO. The efficiencies are clear—but so are the compliance responsibilities. Getting this balance right is critical.

Licensee Obligations

Offshoring remains a valuable option for licensees. The challenge is embedding risk management, transparency, and technological resilience into every outsourcing strategy. Those who succeed will not only meet regulatory expectations but also safeguard consumer trust.

Offshoring must have a continual compliance oversight, as per the Corporations Act 2001, particularly section 912A, which outlines the general obligations of Australian Financial Services (AFS) licensees. The Australian Prudential Regulation Authority’s (APRA) Prudential Standard SPS 231 further requires that outsourcing arrangements do not compromise the licensee’s ability to meet its obligations or hinder ASIC’s access to information.

Licensees should implement internal policies that ensures annual reviews of offshoring arrangements, considering changes in business responsibilities, legislative amendments, and systemic risks.

Updates from ASIC

ASIC’s Regulatory Guide 104 (RG 104) remains the foundation for meeting general obligations, including outsourcing.

Recent ASIC commentary has highlighted potential concern around transparency, data privacy, and consumer trust. At the 2025 Licensee Summit, ASIC Commissioner Alan Kirkland reiterated that the regulator is “agnostic” about offshoring but expects governance and risk management to be watertight.

Offshored functions should be managed as if performed domestically, with clear oversight of qualifications, data handling, cybersecurity, and performance metrics.

What This Means for Licensees

Key actions for licensees include:

• Conducting annual reviews of all offshoring arrangements, ensuring alignment with internal policies and legislative changes
• Ensuring transparency with clients about offshore service delivery, particularly in paraplanning functions
• Implementing robust cybersecurity controls, including monitoring, auditing, and breach response protocols, to mitigate risks associated with offshore data handling
• Maintaining documentation and breach reporting mechanisms.

Offshoring offers efficiency—but not at the expense of compliance. By embedding risk management, transparency, and technological resilience into outsourcing strategies, licensees can stay ahead of regulatory expectations and maintain consumer trust.

Want to Know More?

If you would like to be gain access to compliance policies or templates in relation to offshoring functions, or have any questions about outsourcing obligations in the financial services industry, please contact us at support@grcessentials.com.au