ASIC said in a statement that advisers who subscribe to the FPA code get relief if they meet certain requirements when entering into ongoing fee arrangements, delivering services under an ongoing fee arrangement and renewing the arrangement.
It said advisers must still renew ongoing fee arrangements, but are given flexibility to agree to a renewal interval with the client, provided the interval is not more than three years.
“The Corporations Act allows ASIC to exempt a person from the opt-in requirement provided it is satisfied that those persons are bound by an ASIC-approved code of conduct that removes the need for persons bound by the code to be bound by the opt-in requirement,” the statement said.
ASIC said it approved the FPA code on the basis that it will achieve the same policy outcomes that the opt-in requirement is intended to achieve: to protect disengaged clients from paying ongoing financial advice fees when they are receiving little or no service.
It added that a crucial part of the code is that the FPA meets and maintains certain minimum code governance requirements, and that the FPA has implemented processes to ensure that subscribers comply with the code.
“Sanctions will apply for non-compliance, including termination of subscription to the code and the FPA member no longer having relief from the opt-in requirement,” the statement said.
“ASIC has the power to revoke its approval of a code where it is satisfied that the code no longer meets the requirements.”
Just get on with it. Annual is best and works well for both parties. Stefan.
Agreed… But problem is many advisers just have an ongoing fee tacked onto a client’s account they don’t actually service, hence they are complaining.
Not hard to get clients to pay when you actually offer them a service but many don’t!
Just get the clients to sign the agreement every year
Or better put – it’s an annual fee but client doesn’t get invoiced annually…pathetic. Every other profession renders invoices for services as they’re provided. NO ONE gets three years of fees paid by a third party from a second party’s account. No wonder “advisers” are a joke.
It’s not as simple as it sounds. This ruling relieves a lot of unnecessary admin work placed on those that do the right thing as well as the ‘baddies’. And, if you think advisers are a joke, why read our publications?
Agree!
The joke is that folk like you have an opinion without any knowledge of the planning profession!
Given the service is supplied (largely) to people who are not in the profession, the view of non financial planning individuals is actually extremely important. If the public feel the fee structures are inappropriate then getting more people to get advice might be quite difficult and indeed it may be a reason why the industry is not well trusted.
Hi Peter – financial advisers DO issue an invoice to clients on a yearly basis – its called a Fee Disclosure Statement and it is mandatory. The renewal notice or Opt-in being spoken about is a document which needs to be signed by a client every 2 years to confirm they are still happy to continue.
Regards,
From a ‘joke’ of an adviser,
Or you could be in an ISA fund that ‘subsidises’ advertising, footy clubs, stadiums, horse & car races etc and never actually get any disclosure or benefit at all (unless you are a key union employee, major employer, or ISA official in which case you may get into their corporate box!).
At least advisers have their door open to all their clients to come in when they need assistance, as opposed to ringing useless tele-operators who have 2 days training… time for all their ISA asset based fees to go as well!!
And they try to teach us not to speak double Dutch. Be clear, concise and to the point. Or let confusion rein without clarity?
So it’s 3yrs instead of 2???
SO, IT’S OPT-IN RELIEF BUT YOU NEED TO STILL GET CLIENT OPT-IN…
Maybe you should read correctly the original…