ASIC Corporations (Adara Advisors) Instrument 2025/634

Panel Member. Defined by section 6 as a person who provides financial services on behalf of Adara Advisors and meets the conditions in section 7. The person must be an employee or director of a Panel Member Firm - another person carrying on a financial services business. The Panel Member is not required to be an authorised representative of the Panel Member Firm; the exemption allows them to provide financial services only as an authorised representative of Adara Advisors, despite also being an employee or director of the other licensee. This avoids the double authorisation that would otherwise be needed under section 911B(1) for a person who provides services for two licensees. The Panel Member’s services are limited to wholesale clients who have contracted with Adara Partners.

Volunteer. Defined by section 8 as a person who provides financial product advice on behalf of Adara Advisors. The Volunteer must be a representative of a Volunteer Firm (a person carrying on a financial services business) and an employee of that firm or a related body corporate. The Volunteer is not required to be an authorised representative of Adara Advisors - condition 9(b) only says “representative”, which under the Act includes employees and authorised representatives. This appears designed to capture Volunteers who might give advice in the course of their employment without holding an individual authorisation. The Volunteer must not provide advice to clients of Adara Partners; they only advise Adara Partners itself. This suggests the Volunteer acts as a back-office or support resource, helping Adara Partners formulate advice to its wholesale clients, but without direct client contact.

Panel Member Firm and Volunteer Firm. Both are other persons who carry on a financial services business. The Panel Member Firm must give its consent to the Panel Member’s appointment and confirm no conflict of interest. The Panel Member Firm is expressly prohibited from receiving any financial benefit as a result of the Panel Member’s services (section 7(l)). The Volunteer Firm must also give consent and confirm no conflict, but there is no express condition that the Volunteer Firm receives no financial benefit - only the Volunteer must not receive any. This asymmetry may reflect that Volunteers are employees whose firms may be providing services to Adara Partners or otherwise benefiting, whereas Panel Members are more senior professionals whose firms might otherwise lose fees.

Pro bono model. The simplified outline explains that Adara Advisors’ business relies on prominent industry members working on corporate advisory matters pro bono for Adara Partners, and fees from wholesale clients are donated to an international development organisation. The instrument facilitates this by removing the licensing obstacle that would otherwise require each contributing individual to be separately authorised. The no-financial-benefit conditions (sections 7(i)(iv), 7(l), 9(i)(v), 9(k)) ensure the services are genuinely pro bono. However, the instrument does not define “financial benefit”, leaving interpretation to general law. Benefits in kind (e.g., travel, meals) could arguably be a financial benefit, creating legal risk if provided.

Authorised representative vs representative. The instrument uses “authorised representative” for Panel Members (condition 7(b)) but only “representative” for Volunteers (condition 9(b)). This distinction may be deliberate: Panel Members act under a formal authorisation from Adara Advisors (covered by its AFSL), while Volunteers may simply be employees or contractors of Adara Advisors who are not individually authorised. The distinction matters because an authorised representative is subject to specific obligations under the Act (e.g., s 912C notification of changes). Volunteers who are only “representatives” but not “authorised representatives” may have fewer statutory duties, but they still must comply with the conditions in section 9.

Adara Advisors Pty Ltd is the primary beneficiary. It obtains a tailored exemption that allows it to engage senior industry professionals without requiring them to become authorised representatives of their primary employer. This reduces its compliance burden and recruitment friction - it does not need to negotiate dual authorisation with each Panel Member’s firm. However, Adara Advisors also bears significant ongoing compliance costs: it must obtain and keep written consents and undertakings, maintain a register of Volunteers, ensure each Panel Member gives prescribed disclosures to clients, and verify that no financial benefit flows to Panel Members, Panel Member Firms, or Volunteers. These administrative steps are not trivial.

Adara Partners, as the authorised representative of Adara Advisors, benefits because it can source pro bono expertise from senior people at other firms without those people needing to be separately authorised. The wholesale clients of Adara Partners receive services from highly qualified professionals but must be told that the person is relying on an ASIC exemption. This disclosure may alert sophisticated clients to the unusual licensing arrangement, potentially raising questions about recourse if something goes wrong.

Panel Members (employees or directors of other licensees) are directly affected: they can provide pro bono services without breaching the licensing laws, but they must provide undertakings that restrict their use of confidential information and require them to manage conflicts. They cannot receive any financial benefit - a real constraint if they typically earn fees from similar work. The Panel Member Firm must give its consent and confirm no conflict; the firm also cannot receive any financial benefit. This may deter some firms from allowing employees to participate, especially if the pro bono work could be fee-generating work that the firm might otherwise do. The instrument imposes no positive duty on the Panel Member Firm to monitor the arrangement, but the written confirmation of no conflict likely carries legal weight.

Volunteers are affected similarly but without the authorised representative status. They must meet training requirements of their Volunteer Firm, which may be more or less rigorous than those of Adara Advisors. The Volunteer Firm must consent and confirm no conflict, but it is not prohibited from receiving a financial benefit - a potential gap that could permit the Volunteer Firm to charge Adara Advisors for the Volunteer’s time, undermining the pro bono character. However, the instrument requires the Volunteer to give an undertaking not to receive any financial benefit, which would not prevent the firm from billing.

Competition effects are minor given the narrow scope. The instrument is licensee-specific, so it does not create a general exemption for pro bono advisory models. Other pro bono arrangements would require their own ASIC exemption. This may give Adara Advisors a first-mover advantage, but it also signals that ASIC is willing to grant such exemptions on a case-by-case basis. The effect on the market for corporate advisory services is likely neutral: the pro bono services are donated, not sold, so they do not directly compete with paid advisory services. However, they may reduce demand for paid advice from other firms to the extent that wholesale clients obtain free advice from Adara Partners.

Duties of Adara Advisors. The instrument imposes several gatekeeping duties on Adara Advisors. Before a Panel Member can provide services, Adara Advisors must have received: written confirmation that the Panel Member has the Panel Member Firm’s consent (section 7(h)); a written undertaking from the Panel Member covering conflicts, confidentiality, and no financial benefit (section 7(i)); and written confirmation that the Panel Member Firm has confirmed no conflict of interest (section 7(j)). For Volunteers, Adara Advisors must: keep a register of Volunteers (section 9(g)); receive written confirmation of consent from the Volunteer Firm (section 9(h)); and receive written undertakings from the Volunteer covering conflicts, confidentiality, training, and no financial benefit (section 9(i)). Failure to obtain these documents before services commence means the exemption likely does not apply, exposing the individual to liability under section 911B(1). Adara Advisors also must ensure that Panel Members give the prescribed written disclosure to each client (section 7(k)). There is no express obligation on Adara Advisors to verify the accuracy of the consents or undertakings; the duty is only to receive them. However, general AFS licensee obligations under section 912A (efficient, honest and fair dealing; adequate resources; management of conflicts) would likely require some due diligence.

Duties of Panel Members. Panel Members must: be an authorised representative of Adara Advisors (section 7(b)); provide services only to wholesale clients with a contract for services with Adara Partners (section 7(f)); give the prescribed written disclosure to each client (section 7(k)); provide written consent from their Panel Member Firm (section 7(h)); give a written undertaking with the four sub-conditions in section 7(i); and ensure the Panel Member Firm confirms no conflict (section 7(j)). They must not receive any financial benefit (section 7(i)(iv)). The disclosure to clients must state that the person is an authorised representative of Adara Advisors, an employee/director of the Panel Member Firm (which must be identified), that they rely on an ASIC exemption, and that they provide services only as an authorised representative of Adara Advisors. This disclosure is a shield against client confusion and potential claims of unauthorised conduct. The confidentiality undertakings are separate from any existing duties of confidence the Panel Member owes to their employer under general law or contract.

Duties of Panel Member Firms. The instrument does not impose direct statutory obligations on Panel Member Firms. Instead, the exemption conditions rely on the firm giving consent and confirming no conflict. The firm must also not receive any financial benefit (section 7(l)). If the firm breaches that condition (e.g., by receiving an indirect benefit such as a referral fee or reciprocal arrangement), the exemption may be lost. The firm is not a party to the instrument and cannot be penalised under it, but its conduct could disqualify the Panel Member from relying on the exemption. This creates a compliance risk for the Panel Member and Adara Advisors that is largely outside their control.

Duties of Volunteers. Volunteers must: be a representative of Adara Advisors (section 9(b)); only provide financial product advice to Adara Partners (section 9(d)); not provide advice directly to clients (section 9(e)); give written confirmation of consent from the Volunteer Firm (section 9(h)); give a written undertaking with five sub-conditions (section 9(i) - conflicts, confidentiality, training, and no financial benefit); and not receive any financial benefit (section 9(k)). The training condition - to satisfy the training requirements of the Volunteer Firm in relation to conflicts, confidential information, and any other relevant training - is notable. It outsources the training standard to the Volunteer’s employer rather than requiring Adara Advisors to set it. This may lead to inconsistent training quality. The undertaking must also cover “any other relevant training” as determined by the Volunteer Firm, which is an open-ended obligation.

Rights. The primary right is the right of Panel Members and Volunteers to provide financial services or advice without being in breach of section 911B(1). This is a conditional right: if any condition is not met, the exemption does not apply, and the person may be liable. Clients have no direct rights under the instrument; their rights flow from the general law (contract, tort, statute) if the adviser breaches duties.

The instrument itself does not create any penalty provisions. Its sole legal effect is to provide an exemption from subsection 911B(1) of the Corporations Act for the two categories of persons when the conditions in sections 7 and 9 are satisfied. If a condition is not met, the exemption does not apply. That means the person is providing financial services without an AFS licence or authorisation, contrary to section 911B(1). A contravention of section 911B(1) can attract civil penalties (up to the greater of 5,000 penalty units or three times the benefit obtained - see sections 1311, 1317G) and criminal penalties where dishonesty or recklessness is involved (sections 911C, 911D). ASIC may also issue infringement notices for strict liability offences.

Enforcement risk therefore arises from non-compliance with the instrument’s conditions. Key risk areas include: the Panel Member or Volunteer receiving any financial benefit (even reimbursement of expenses could arguably be a benefit); the Panel Member Firm receiving a benefit (for Panel Members); failure to obtain written consents and undertakings before services commence; failure to give the prescribed client disclosure; Panel Members providing services to retail clients or clients without a contract with Adara Partners; Volunteers providing advice directly to clients; and Adara Advisors failing to maintain the register of Volunteers. Each of these failures could retrospectively invalidate the exemption for that particular service, exposing the individual to liability.

ASIC can also take action against Adara Advisors for breach of its AFS licence conditions or general obligations under section 912A if it fails to adequately supervise or administer the conditions. The instrument does not confer any special immunity on Adara Advisors. ASIC could also vary or revoke the instrument under the powers in section 926A, though this would require a fresh instrument. The repeal date (1 October 2030) means the exemption automatically sunsets; ASIC could also revoke earlier if concerns arise.

There is no express power for private litigants to enforce the instrument conditions. However, a client who suffers loss might argue that the exemption was not available because conditions were not met, and therefore the adviser was unlicensed, giving rise to a claim for breach of statutory duty or for compensation under the Act (e.g., section 1020B for defective product disclosure, or section 912A(4)). The instrument’s conditions are mandatory for the exemption to operate; they are not mere guidelines. Courts would likely treat them as exhaustive - see the wording “The exemption … applies where: (a) … (b) …” which is conjunctive.

Subsection 911B(1) of the Corporations Act 2001 is the core provision that the instrument modifies. The instrument creates an exemption from that subsection only; it does not exempt from any other provision of the Act. Panel Members and Volunteers remain subject to all other licensing, conduct, and disclosure obligations. Notably, the obligation on an AFS licensee to ensure its representatives are adequately trained and competent (section 912A(1)(f)) continues to apply to Adara Advisors. For Volunteers, the instrument outsources training standards to the Volunteer Firm, but Adara Advisors retains ultimate responsibility under section 912A for the services provided on its behalf.

The general obligation to manage conflicts of interest (section 912A(1)(aa)) is partly addressed by the required undertakings. However, those undertakings are private contractual documents; they do not replace the licensee’s statutory duty to have a robust conflicts management policy. ASIC could still take action against Adara Advisors if its conflicts management is deficient, even if the undertakings exist.

The Corporations Act’s provisions on authorised representatives (Part 7.6 Division 5, especially sections 916A-917) interact with the Panel Member exemption. Panel Members must be authorised representatives of Adara Advisors (section 7(b)), so they must be listed on Adara Advisors’ AFS licence and subject to section 916A (authorised representative as agent). The instrument does not exempt from section 916A, so Panel Members have the same statutory agency as any other authorised representative. For Volunteers, who are “representatives” but not necessarily authorised representatives, the statutory regime for authorised representatives does not apply; they are treated as employees or contractors of Adara Advisors.

The National Consumer Credit Protection Act 2009 and Australian Securities and Investments Commission Act 2001 are not directly engaged, as the instrument is limited to financial services under Chapter 7 of the Corporations Act. However, if the financial services involve credit advice, other licensing requirements may arise.

The Privacy Act 1988 applies to the handling of personal information. The confidentiality undertakings in the instrument supplement but do not replace the obligations under that Act. The instrument does not create any new exemption from privacy law.

The instrument does not interact with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006; licensees must still comply with AML/CTF obligations regardless of this exemption.

The Competition and Consumer Act 2010 (Australian Consumer Law) applies to the provision of financial services, particularly sections 18 (misleading conduct) and 29 (false representations). Panel Members who provide the required disclosure (section 7(k)) may reduce the risk of misleading conduct claims by making it clear they act solely for Adara Advisors.

Interaction with professional obligations. Panel Members who are directors or employees of other licensees owe fiduciary duties to those firms. The instrument’s confidentiality undertakings are designed to manage conflicts, but they do not override equitable duties of confidence or contractual duties under employment agreements. A Panel Member could be sued by their Panel Member Firm for misuse of confidential information if the undertaking is breached, independent of any ASIC enforcement.

State laws are not preempted by this Commonwealth instrument. State fair trading laws and occupational licensing laws (if any) continue to apply.

This instrument is a new legislative instrument made on 18 September 2025 by Jacqueline Cochrane, delegate of ASIC. It commenced on the day after registration on the Federal Register of Legislation (section 2). It has not been amended since commencement. The instrument is made under paragraph 926A(2)(a) of the Act, which allows ASIC to exempt a specified person from subsection 911B(1). It does not amend any existing instrument. The repeal clause (section 10) provides for automatic repeal at the start of 1 October 2030. This sunset date means the instrument has a five-year lifespan. If Adara Advisors wishes to continue the model beyond 2030, it must apply for a new exemption or the instrument must be remade. The repeal does not affect the continuity of services already provided; the exemption ceases for future services from that date.

No amending instruments are referenced. The instrument includes a simplified outline (section 4) and definitions (section 5) that align with standard ASIC drafting. The definitions are limited to the Act, Adara Advisors, Adara Partners, and the two exempt categories. No Australian Accounting Standards, regulatory guides, or other instruments are incorporated by reference. The instrument is self-contained.

As at the instrument’s commencement in 2025, there is no reported litigation. Being a narrow, licensee-specific exemption, direct litigation is unlikely. However, the conditions may be tested indirectly. For example, a wholesale client of Adara Partners who suffers a loss might argue that the exemption did not apply because a condition was not met, and therefore the Panel Member or Volunteer provided unlicensed financial services. This would shift the legal analysis from whether the services met the exemption to whether the adviser breached section 911B(1). A court would then examine whether the conditions were strictly satisfied.

Potential litigation issues include: what constitutes a “financial benefit” for the purposes of sections 7(i)(iv), 7(l), 9(i)(v), and 9(k). The term is undefined. The ordinary meaning is broad - any advantage of monetary value, including non-cash benefits. Courts may consider whether reimbursement of out-of-pocket expenses (e.g., travel to client meetings) qualifies as a financial benefit. If so, the exemption could be jeopardised. Another issue is whether the written confirmation from the Panel Member Firm (section 7(h)) must be a specific consent to the appointment as an authorised representative, or whether a general consent to pro bono work suffices. The language “consent … to the Panel Member being appointed as an authorised representative” suggests a specific consent is required.

The register of Volunteers condition (section 9(g)) may raise questions about what constitutes adequate maintenance - e.g., must it be updated promptly upon each Volunteer engagement? A failure to record a Volunteer could mean the exemption does not apply.

No class actions or regulatory proceedings are known. The instrument is recent, and the business model it supports is voluntary, so the probability of litigation is low. However, if the scale of the pro bono services grows, the overlay with the participants’ primary employment may create tension that leads to disputes between Panel Members and their Panel Member Firms (e.g., allegations of diversion of business opportunities). Those disputes would be resolved under contract law and fiduciary duties, not under this instrument.

Financial benefit is undefined. The prohibition on the Panel Member, Panel Member Firm, and Volunteer receiving any financial benefit is absolute, but the term is not defined. Normal business courtesies - lunch with a client, attendance at a conference paid by Adara Partners - could arguably be a financial benefit. Any reimbursement of expenses might also count. To be safe, all costs must be borne by the individual or their firm, or specifically excluded by a written arrangement that does not create a benefit. This is a trap for the unwary.

Panel Member Firm’s benefit prohibition. Condition 7(l) says the Panel Member Firm “does not receive any financial benefit as a result of the Panel Member providing the relevant financial services.” This is broad. If the Panel Member Firm gains any indirect benefit, such as enhanced reputation, a reciprocal referral, or an opportunity to pitch for paid work from Adara Partners’ clients, it may breach the condition. The condition cannot be waived or modified by consent.

Volunteer Firm benefit not prohibited. In contrast to Panel Members, there is no condition that the Volunteer Firm receives no financial benefit. This asymmetry could be exploited: a Volunteer Firm could charge Adara Advisors a fee for the Volunteer’s time, undermining the pro bono nature, while the Volunteer personally receives nothing. The instrument does not prevent this, possibly because Volunteers provide advice only to Adara Partners (not clients), so the risk of fee leakage is lower. Nevertheless, it creates a potential loophole.

Disclosure must be in writing and before services. Section 7(k) requires disclosure to the client “before providing the relevant financial services”. The disclosure must include the four bullet points exactly. A verbal disclosure or email sent after services commence would not satisfy the condition. The client must also be told the Panel Member Firm’s identity. This may raise privacy concerns for the Panel Member if they work for a sensitive firm.

No automatic exemption for other pro bono work. The instrument is specific to Adara Advisors and its authorised representative Adara Partners. Another licensee with a similar model cannot rely on this instrument. They must apply for their own exemption. This creates a regulatory barrier to entry for other pro bono arrangements.

Register of Volunteers must be kept. Condition 9(g) requires Adara Advisors to keep a register of Volunteers it engages. If the register is incomplete or inaccurate, the exemption may not apply for any Volunteer not properly recorded. The register is a positive obligation; failure to maintain it could be a breach of the condition for all Volunteers if the condition is interpreted as a continuing requirement.

Training undertaking. The Volunteer must undertake to satisfy the training requirements of the Volunteer Firm. If the Volunteer Firm does not have specific training on conflicts or confidentiality, the undertaking may be meaningless, leaving the Volunteer without adequate guidance. The instrument does not require Adara Advisors to impose its own training.

Repeal date. The instrument is repealed on 1 October 2030. Services provided after that date are not exempt. Adara Advisors must plan for the sunset. The repeal does not affect services provided before that date, but any ongoing advisory relationships may be disrupted.

No grandfathering or transition. There are no transitional provisions. If the instrument is revoked earlier by ASIC, all conditions cease immediately.

For Adara Advisors, compliance requires meticulous documentation before any Panel Member or Volunteer provides services. The steps are:

1. Confirm AFSL coverage. Ensure the licence covers the financial services that Panel Members and Volunteers will provide. This includes any financial product advice and dealing. If the licence is limited, apply for a variation.

2. Engage Panel Members. For each Panel Member:

   • Obtain written confirmation from the Panel Member Firm that it consents to the Panel Member being appointed as an authorised representative of Adara Advisors.
   • Obtain written confirmation from the Panel Member Firm that it has confirmed there is no conflict of interest for it arising from the Panel Member providing the services.
   • Obtain a written undertaking from the Panel Member covering clauses (i)-(iv) of section 7(i): manage conflicts; not misuse confidential information of either Adara Advisors or the Panel Member Firm; not receive any financial benefit.
   • Appoint the Panel Member as an authorised representative of Adara Advisors (this triggers obligations under s 916A and notice to ASIC under s 916F). Ensure the authorisation covers the specific services.
   • Before the Panel Member provides services to any client, ensure the Panel Member gives the client the written disclosure required by section 7(k). This disclosure must identify the Panel Member Firm and state the exemption.
   • Put in place systems to monitor that the Panel Member only serves wholesale clients who have a contract for services with Adara Partners. Do not allow services to retail clients.
   • Ensure no financial benefit flows to the Panel Member or the Panel Member Firm from the services. This includes indirect benefits. Consider signing a deed confirming that no fee, reward, or benefit is given.

3. Engage Volunteers. For each Volunteer:

   • Obtain written confirmation from the Volunteer Firm that it consents to the Volunteer being engaged as a representative of Adara Advisors.
   • Obtain written confirmation from the Volunteer Firm that it has confirmed no conflict of interest.
   • Obtain a written undertaking from the Volunteer covering clauses (i)-(v) of section 9(i): manage conflicts; not misuse confidential information; satisfy the Volunteer Firm’s training requirements (including conflicts, confidential information, and any other relevant training); not receive any financial benefit.
   • Add the Volunteer to the register required by section 9(g). The register should contain at minimum the Volunteer’s name, the Volunteer Firm, date of engagement, and copies of consents and undertakings.
   • Ensure the Volunteer only provides financial product advice to Adara Partners, not to clients. Adara Partners must have oversight to prevent Volunteers from giving advice directly to wholesale clients.
   • Ensure the Volunteer does not receive any financial benefit. The Volunteer Firm is not prohibited from receiving a benefit, but Adara Advisors should consider whether accepting a fee from the Volunteer Firm might undermine the pro bono character and potentially breach other obligations (e.g., s 912A).

4. Ongoing obligations. Adara Advisors should periodically (e.g., annually) review that conditions are still satisfied: that the Panel Member Firm has not withdrawn consent, that the Panel Member is still an employee/director, that no financial benefit has been received, that the register is up to date, and that training requirements for Volunteers are being met. The confidentiality and conflict undertakings should be reviewed if the Panel Member’s role at the Panel Member Firm changes. ASIC may request evidence during a surveillance.

5. Client-level compliance. For each client engagement involving a Panel Member, document that the disclosure in section 7(k) was given and kept. This could be a standard form that the Panel Member signs and delivers to the client, with a copy retained.

6. Sunset planning. Well before 1 October 2030, assess whether a new exemption is needed. Prepare a submission to ASIC with evidence of the operation and continued need.

For Panel Members and Volunteers, the key steps are: obtain the necessary consents from their employer; give the required undertakings; comply with the conflict and confidentiality undertakings; ensure they receive no financial benefit; and, for Panel Members, give the disclosure to each client. Panel Members should also ensure their Panel Member Firm does not receive any financial benefit - a point over which the Panel Member may have limited control.

For Panel Member Firms and Volunteer Firms, while not statutory parties, they should carefully consider the consent and no-conflict confirmation. Giving consent without proper review could expose the firm to reputational risk if the pro bono services later cause client harm. The firm should also have policies to prevent any financial benefit from flowing to it (for Panel Members) or at least to manage that risk.