Many reef fishes have a broad vertical distribution which extends into the upper mesophotic zone (30 – 60 m). When connectivity between shallow and deep reefs is unknown, the presence of a deep-water population can create uncertainty in fisheries management. This is particularly relevant where exploitation is restricted to certain depth ranges because of gear limitations or market preferences. Understanding population connectivity across vertical reef gradients is therefore critical for effective fisheries management, yet depth-related movements are rarely incorporated into stock assessments. In Tasmania, Australia, banded morwong (Chirodactylus spectabilis) provides a unique case study, as commercial fishing for the live fish trade is largely confined to depths shallower than 30 m, despite a substantial proportion of the population occurring in deeper waters. Current stock assessments assume that deep-water populations contribute to the replenishment of exploited shallow-water populations via movement of adults, although empirical evidence for this exchange is lacking. We used acoustic telemetry to quantify fine-scale movements of forty-six banded morwong across a depth gradient to assess the degree of connectivity between shallow (< 30 m) and deep (> 30 m) reef habitats on the Tasman Peninsula. Fish were tracked for a five-month period including the spawning season when banded morwong undertake regular diel migrations from shallow to deeper reefs to spawn. Our study provides estimates of vertical exchange in banded morwong and improves understanding of the extent to which protection is afforded by depth in this locally important fishery. In addition, study outcomes directly inform the structure and parameterisation of the stock assessment model, which is of critical importance to ensure long-term fishery sustainability. More broadly, the work highlights the importance of having empirical data on vertical reef fish distribution and movements before depth refuge assumptions can be meaningfully incorporated into assessments of commercially important species.