What makes AFSL Responsible Managers so important?

Topics: RG105 | AFSL Responsible Manager CPD

What makes AFSL Responsible Managers so important?

Have you ever noticed that behind every hero there stands a sidekick? Someone who is happy to relinquish their place in the spotlight to let the hero shine, ready with advice, specialist insight or a witty comeback – in other words, the ultimate wingman. In financial services, we call this person a Responsible Manager (RM), and they’ve never been more crucial to helping organisations navigate the complex world of compliance.

What is a Responsible Manager?

Responsible Managers are critical to a company demonstrating and maintaining its compliance and competence. ASIC expects RMs to play an active role in fostering a compliance culture in their business and in the financial services industry more broadly. They’ve never been more crucial to helping organisations navigate the complex world of compliance. In this article, we outline what makes Responsible Managers so important within financial services. For more information, check out our insight outlining ‘How to become a Responsible Manager?.’

Responsible Managers have elite status

Only the best of the best can be considered for RM status. They have a unique blend of specialist skills, knowledge and experience that enable them to complete their role. A Responsible Manager must have a thorough understanding of the regulatory framework in which their business operates. They must possess relevant product and service qualifications and they require a minimum of 3 years’ practical experience in the field.

This combination of training and field work enables a Responsible Manager to see what others may miss. For example, if certain parts of the business are failing to follow process, this could be a sign that there is disconnect between the regulatory requirements and business rules, and how they’ve been implemented within the organisation. Your Responsible Manager can identify the obstacles, replot your course and help to train your staff to follow the new procedures.

RMs promote a culture of responsibility

Creating and maintaining a culture of responsibility is very much in the Responsible Manager’s remit. They recognise that a single pilot cannot steer the jet alone – there are countless people involved in ensuring the craft remains airborne, and in order for the mission to be a success, each person in the organisation must understand their role and take responsibility for their actions.

Building this culture of responsibility starts with establishing a vision and set of values for the business. These are used as a basis for measuring the impact of any and all decisions, no matter how high up the chain a person may rank. Next, each member of the team must be trained appropriately, so they are clear on the rules and standards that apply to not only them, but the business as a whole. Finally, all staff must know how to identify and report a problem, without fear of retribution. A culture of responsibility is one in which maverick behaviours must be called out and addressed.

AFSL Responsible Managers are skilled communicators

In order to get the whole organisation to buy-in to a culture of responsibility, the Responsible Manager must be able to communicate clearly and transparently.

In contrast, there are situations in which a Responsible Manager must use their influence and negotiation skills to apply gentle pressure to achieve organisational competency and change. This involves having a voice at the table where decisions are made. They will face challenges from other leaders as to what benefits the business the most. It is vital that the Responsible Manager possesses the ability to negotiate an outcome that will ensure the organisation operates safely and compliantly, even if that means picking up a microphone and joining their pilot in a bar-based serenade.

Responsible Managers know what to do when risks emerge without warning

From time to time, things go wrong in business. Risks emerge without warning, and you need eyes on the skies. This is particularly the case in finance, where risks take many forms, not just financial. You want someone you can trust to let you know when a small adjustment needs to be made or if evasive action is required. Your Responsible Manager is perfectly positioned to see what is going on in your organisation and the world in which you operate. They should be among the first to alert the organisation’s leaders to new regulations or requirements, as well as potential issues that have arisen internally due to a lapse in process or procedure. They can also help you implement change to address these risks.

Aspiring to become a Responsible Manager?
Our Responsible Manager Fundamentals includes what aspiring RM’s need to know about their role and responsibilities, and the industry regulations licensees must comply with.

Already a Responsible Manager needing CPD?
Our Responsible Manager CPD is an essential annual update for responsible managers and governance, risk and compliance leaders. Earning 15 CPD hours/points.

Needing a refresher on Australian regulations?
Our Regulation of Australian Financial Services is designed for those who are taking on the role of a Responsible Manager for an AFS licensee and need to prove that they have knowledge of Australian regulations.