RG 181 — Managing Conflicts of Interest

How conflicts must be controlled, disclosed, and checked in your advice

What Is RG 181?

Regulatory Guide 181 covers AFS licensing and managing conflicts of interest. It applies to licensees, representatives and applicants, explaining the general obligation to have adequate arrangements to manage conflicts fairly and the conflicts priority rule for personal advice. ASIC renewed the guidance in December 2025.

RG 181 sits alongside RG 246. RG 246 bans specific pay structures. RG 181 is broader — any situation where duties clash, from cross-ownership and related-party products to referral payments, staff bonuses and personal holdings. Examples ASIC highlights include brokers influenced by shareholdings and fund operators retaining fee margins.

Common Conflicts Consumers Miss

Ownership conflicts arise where your adviser recommends products issued by their parent, such as a bank-owned licensee recommending in-house funds or platforms. Remuneration conflicts include commissions, bonuses and soft-dollar benefits. Referral conflicts cover payments between advisers, mortgage brokers, accountants and lawyers. Personal conflicts include an adviser holding the same product they recommend without disclosing it.

Vertical integration does not automatically mean bad advice, but it raises the bar for disclosure. Your documents should explain why an in-house product was chosen over external alternatives, with evidence of comparison. A single-provider recommendation without justification is a classic file-review failure.

What Good Disclosure Looks Like

Under RG 181 and RG 175.126-127, disclosure must be specific, prominent and timely. Your FSG should map ownership, approved product lists, and payment flows before advice is given. Your SOA should then link each conflict to each recommendation: what the conflict is, how it could affect you, what steps were taken to manage it, and why the recommendation remains in your best interests despite it.

Generic lines such as we may receive benefits fail the test. Look for named entities, dollar amounts, percentage rates, and a clear statement that your interests prevailed. Where a conflict cannot be managed fairly, the licensee must decline or refer elsewhere. AdviserCheck checks for named payers, APL restriction language, and contradictions between independence claims and disclosed ties.

How to Challenge a Conflict

Ask three questions in writing: what conflicts exist in relation to my advice, how were they managed, and what alternatives free of that conflict were considered? Request the licensee's conflicts register excerpt relevant to you and the file note showing the s961J priority assessment. Compare the recommended product's fees and performance against two independent alternatives.

If the response is evasive, escalate through internal dispute resolution and then AFCA. ASIC's 2024-25 enforcement — including bans for Shield Master Fund advice and fee-for-no-service failures — shows conflicts remain an enforcement priority. Keep all versions of your SOA, FSG and consent forms.

Real-World Conflict Examples from Enforcement

ASIC's 2024-25 enforcement shows how unmanaged conflicts harm consumers. In the Shield Master Fund matter, advisers recommended high-risk fund investments without considering alternatives or disclosing ties, leading to bans of 4-8 years. In fee-for-no-service cases, licensees charged ongoing fees while providing no review, a systemic conflict between revenue and service. In unregistered-advice matters, licensees allowed representatives to advise outside authority to retain business, prioritising growth over compliance.

Each case shared a pattern: ownership or pay influenced recommendations, disclosure was generic, and file notes lacked a s961J priority assessment. Consumers can apply the lesson by asking for the alternatives comparison, the dollar cost of any in-house versus external option over five years, and the written conflicts assessment. Where those are missing, treat it as a gap worth challenging before you sign.

Frequently Asked Questions

Is an adviser with conflicts automatically non-compliant?
No. Conflicts must be identified, managed fairly and disclosed. Only unmanaged, undisclosed or banned conflicts breach the law.

Where do I find conflicts in my documents?
In the FSG (ownership, pay, associations) and the SOA fees, remuneration and conflicts sections. Both must be specific, not boilerplate.

What is s961J priority?
Where your interests conflict with your adviser or licensee interests, yours must prevail. The SOA should show that assessment.

How is RG 181 different from RG 246?
RG 181 covers all conflicts management. RG 246 covers banned pay specifically. Most files need both checks.