ASIC tips highlight onerous new FDS regime
Guidance provided by the Australian Securities and Investments Commission (ASIC) around its new fee disclosure regime has highlighted the onus placed on advisers to act promptly when clients for any reason opt out or don’t fill in their paperwork.
In a guidance document titled ‘Tips for complying with fee disclosure and renewal notice obligations’, the regulator made it clear that if a client terminates an ongoing fee arrangement (OFA) by opting out or by not returning a signed renewal document “you need to stop charging them fees under the OFA”.
What is more, it makes clear that it is the adviser’s responsibility to stop such arrangements where fee deductions are occurring via platforms, including checking that they [the platform] had actually turned off the fees.
It said that where clients were charged through fee deductions on the part of a product issuer or platform provider, it was wise to implement processes to reduce the risk of non-compliance including providing instructions to third party product providers and platform providers to turn off fees.
ASIC is also recommending that advisers run regular reconciliation and exception reports comparing their incoming fee revenue from the fees they should be receiving from OFA clients.
It said this might help advisers detect instances where clients’ fees had not been turned off and required further investigation.
Recommended for you
ASIC data shows the number of smaller AFSLs with less than $50 million in revenue has increased by 25 per cent in the past year, but the regulator believes they are still under reporting breaches.
Former financial adviser and Coalition backbencher Bert van Manen has introduced a bill in Parliament, building on Michelle Levy’s good advice duty and calling for SOAs to be scrapped.
Following its recent partnership with Otivo, Colonial First State has now announced an arrangement with Viridian Advisory to offer unadvised members with one-off, topic-based financial advice.
Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand.