Following its passage through the House of Representatives earlier this month, the Financial Sector Reform (Hayne Royal Commission Response No. 2) Bill 2020 passed the Senate on Wednesday.
The bill was listed as non-controversial legislation but ifa understands that following advocacy from the advice sector, cross-bench senator Rex Patrick had proposed some last-minute amendments to the bill. However, Mr Patrick’s amendments were eventually withdrawn and the bill passed the upper house without issue.
Commenting on the passage of the legislation, Minister for Superannuation, Financial Services and the Digital Economy Jane Hume said the changes were “an important step in restoring trust and confidence in Australia’s financial system”.
“The passage of [the] bill follows through on the government’s commitment to implement the recommendations from the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry,” Ms Hume said.
“Under the legislation passed today, clients of financial advisers will receive an annual, forward-looking summary of fees and corresponding services, in addition to existing disclosures.”
The legislation faced criticisms from many corners of the industry, with the AIOFP, PIFA and AFA all lobbying cross-bench senators for last-minute amendments to the bill.
The new laws are expected to cost the industry $28 million in terms of up-front an annual compliance expenses.
AIOFP executive director Peter Johnston said the passage of the bill should be viewed by advisers as the final nail in the coffin for the Liberal Party as a pro-business political movement.
“As they have done for the past eight years, the Liberal Party will not listen to the industry or consumers about their legislative pathway and agenda to remove advisers from the industry,” Mr Johnston said.
“The advice community must now return the compliment by removing them from office. This is yet again another blatant disregard for consumers and the cost of advice justified by commissioner Hayne’s misguided recommendations.”
Apparently using an Annual Advice and Service Agreement (contract) trumps the need to produce these, or so AMP management told us yesterday
Yes that’s correct, ongoing advice fee = a fee for OVER 12 months.
Pretty positive ASIC’s definition of a Service (that being a RoA) was not explained.
Am I missing something? Isn’t this just consolidating paperwork where, rather than both an FDS and Ongoing Agreement, there is just the one annual document?
I dont think I want to hang around for 5 years gaol for the oversight of a signature. I think I’m out!
If meeting you client once a year and getting them to agree to keep paying you is too much, then maybe getting out is a good idea.
But it’s not as simple as that. If you get the renewal date or the signature date or the meeting date out of sync by a couple of days, you have to refund a full year’s worth of fees or risk being struck off.
Clients can’t believe how manic and uptight advisers get about these things now, with 2 year Opt-In. They think it’s ridiculous we insist they come in for a meeting by the xth of this month, rather than delaying it for a few weeks because they’re a bit busy. Moving to annual Opt-Ins will be impossible to administer, unless all your clients are bored retirees who always come in for meetings exactly when you tell them because they’ve got nothing better to do.
Squeeze out the independents with higher costs and let the institutions/banks waltz straight back in. You can see it coming a mile away.
The AIOFP are running a strategy of targeting marginal liberal seats for the upcoming election published in the AFR 2 weeks ago.. Tried to stop fee consent forms in the Senate but the independents didn’t have the numbers to defeat it. They can do amendments in the Senate as the did with the FASEA exam and course extensions in June last year.
Check it out, join up and take action as a group to get them out!
Get them out and the Union backed ALP in….. lest just jump out of the frying pan directly into the Furness!!
Do you realise that getting the libs out would mean putting Labor in charge. Unless you are an industry fund adviser this may not be in your best interest.
Be careful what you wish for.
Its the dishonesty that gets me. Just ban the industry, why do this and slowly and drag out the eventual death of the industry? why string everyone along?
ban the industry? you sir are a moron
Fascinating that a day later, this is the ONLY article published on this legislation. It’s as if 20,000 advisers don’t even exist.
Soon enough, we might not…and that seems to be the objective…
I was thinking the same thing.
Have written to clients already that deducting fees out of super is going to have an administration charge of 1500pa per account. Passing every cent of this on. Clients have been given the option of an invoice outside of super or the additional fee. every adviser must be passing the full cost of this onto every client and loading up the cost by a risk factor as well, don’t be fooled thinking it is just admin time, because inevitably some confused client and trustee will land up wasting an inordinate amount of your time and you will need to be compensated for this risk. Do not do nothing, pass this cost on in FULL.
Doing the same. My fee increase is effective 1 July 2021.
Why the increase inside super?
Because now we are going to have to deal with trustees, yet another third party surveillance body, this is going to be another layer of time suck. The trustee is going to be communicating with YOUR client as well. Don’t underestimate the cost of this third party influence of your business.
Your cost is exaggerated. And read the bill it’s an advice fee for providing advice each and every year. Not just a renewal.
Great if you could explain how you arrived at the figure of $1,500. Seems a little bit high to me, but maybe I just don’t have the experience you do.
Gee, I wonder why half the advisers haven’t sat the FARSEA exam yet?
Moronic Canberra bubble LIERS !!
We want to make Advice more Affordable ?
Yep we have all been totally confirmed this is absolute RUBBISH, POLITICAL LIES.
These clowns only know 1 thing.
EVER INCREASING BS REGS !!!!!
And meanwhile the super legislation change to allow up to 66 year olds (extra two years) to use the bring forward rule is sitting in the Senate – a Government election promise agreed to by Labor so the votes are there but still it sits – infuriating if you are about to turn 66 (Treasury Laws Amendment (More Flexible Superannuation) Bill 2020)
F*wits.
and more joy for the advice community to follow….not!
So much for the ASIC advice consultation process. Now thousands of smaller investors are going to be ditched by their advisers. Centrelink here we come…
Cheers to not understanding the advice framework and continuing to diminish the industry. Making advice again, rise to higher costs for all involved. Kicking hard working advisers down one at a time.
More costs to consumers! brilliant work. So much for reducing costs. Now the super Trustees will be scrutinising adviser fees and creating more paperwork to adviser can be paid. What an industry!
Dumb and Dumber running the Parliament…???? % regulators and now five times we need to disclosue to our time-poor clients their fees and charge them for this waste…lets kick these DEAF politicians out of their comfy seats where they think they have jobs for life. Let them feel what pressure is like – after all we are well verses and well used to relentless pressure….
Yep let’s have the politicians reapply for their pay every year.
I would have a long list of Pollies that would not be rehired and paid.
Frydenberg, ODwyer (already gone), Hume, Roberts, all LIBS involved in Advice and Super have been complete disasters to Real Advisers.