Licensees slash compliance spending: Survey

An alarming number of licensees are spending less on compliance, a new survey from Holley Nethercote shows, but a slew of reforms slated within the next 18 months could catch them off guard.

Out of the 179 AFS Licensees and 29 credit licensees surveyed, 40% spent less than $100,000 on internal compliance staff compared to 29% in 2024.

More than half (57%) spent less than $50,000 on external compliance services as opposed to 39% last year.

Holley Nethercote managing partner Paul Derham said while the decrease in spending is likely a reflection of less regulatory change during the period, this is expected to reverse in the next 18 months.

This is thanks to a "tsunami of regulatory reforms wash over corporate Australia" such as Delivering Better Financial Outcomes 2 (DBFO), AML/CTF, Privacy and Digital Assets, he said.

Under the re-elected Albanese government, industry bodies are calling for the swift passage of major legislation such as Payday Super and DBFO within the first 100 days of parliament.

The law firm's 2025 Compliance Trends Survey also asked licensees about how they manage conflicts of interest.

Two thirds of smaller businesses with up to 50 representatives said they have no conflicts of interest whatsoever.

One third of larger businesses have the same sentiment. Derham said this is despite the fact that Australia's regulatory system works on an assumption that conflicts of interest are to be expected and managed.

Meanwhile, artificial intelligence (AI)-related record-keeping questions are top of mind for licensees. The survey found an upward trend in the use of AI to draft meeting minutes.

"Another 33% of licensees are considering but have not yet adopted AI for this purpose. This is a timely reminder that licensees are still responsible for the accuracy of documents generated by AI. Also, the audio and full written transcripts that AI creates are discoverable by ASIC or a court and captured by various record-keeping laws," said Derham.