In a statement, ASIC said it had taken into account industry feedback in making the legislative instruments and considered that they struck “an appropriate balance between minimising regulatory burden for the financial advice and superannuation industries and ensuring that consumers receive the information that is relevant to them”.
The regulator said it had also published examples of written consent forms and would write to super trustees around their new obligations.
The new rules would come into effect from 1 July 2021 and include the ability for consumers to give digital as well as written consent to deduct ongoing fees.
For existing customers, new fee arrangements would begin on the anniversary day of the previous ongoing fee arrangement. For new customers, fee arrangements would begin on “a day that is no more than 30 days after the fee recipient gives the account holder all the information require[d] to be included in a written consent”, according to the legislative instrument.
“If the amount of an ongoing fee the account holder will pay during the upcoming year cannot be determined — a reasonable estimate of the amount of the ongoing fees the account holder will pay during the upcoming year and an explanation of the method used to work out the estimate” may be provided, ASIC said.
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ASIC is corrupt.
Zero regulation around the yearly hundreds of millions flowing from union industry funds out from member balances in duplicated conflicted vertically aligned self-interests, and yet for us to attempt to earn a living ASIC have made it purposely confusing and onerous.
Well played f#ckers, well played.
Note the ASIC “informed consent form for NON-ONGOING fees” is not a template, even though their release yesterday looks very like a template. The Explanatory Memorandum of the Haynes 2 legislation states that “This instrument making power does NOT extend to the form in which consent must be provided. This ensures that trustees and advisers have the flexibility to develop consent forms in a way that is compatible with their existing systems to reduce their compliance costs.”
This is the problem when you have career public servants determining the “best way” of running an industry they have little-to-no practical experience in. You end up with 5x the rules and paperwork actually needed under a system that’s essentially a carbon copy of a “Yes Prime Minister” way of keeping one’s public servant colleagues employed and justification for increases in budgets and funding. You also end up with enough grey area so that ASIC can continue to rape and pillage advisers and the industry at will in order to satisfy their power trip needs, and claim they’ve protected consumers. Show me one single consumer who’s been protected by the banning of an Adviser for paperwork/administrative issues or deficiencies that ASIC have destroyed their career over. Show me one single consumer who even wants to receive or read a SoA, RoA or fee statement. Come on ASIC – show us.
only the clients who have been encouraged to complain to AFCA, that suddenly want all of those disclosure docs.
it is very clear now, you have to be insane to engage in “ongoing” servicing. One-off servicing it is, just as they do over at the Union super funds.
Isn’t another name for “one off servicing” brokerage? Just on a dollar basis instead of a percentage. So they’re basically forcing advisers to go back to the days of stockbroking.
Thats what happens when the Government interferes with the market.Do we really think the clients and the Aus public at large will pay for services not received? really? are they that dumb?
I dont think so..Clients know they must pay for services rendered!
“Do we really think the clients and the Aus public at large will pay for services not received? really? are they that dumb?”. Umm….yep. We just had a couple of $ billion example and look at what the industry funds are doing right now.
Chris, that assumes the clients have actually paid for something they didn’t receive. The majority of the instances I have seen, which I acknowledge is an exceptionally small percentage of the billions returned, were due to paperwork issues and the client was happy that what they thought would happen did in fact happen.
There is so much transparency no one knows what they are looking at.
Confusion and chaos thanks to regulatory interference.
Costs moving north.
Fees are moving north.
Just read it. ASIC have thrown advisers under the bus again. There is no guidance about what constitutes a ‘reasonable estimate’. There are so many variables for a percentage fee – what assumptions do we use for the returns, contributions, pay rises, SG increases, insurance premiums deductions etc. etc. I guess ASIC will make that up in the future and then retrospectively screw us with the most draconian interpretation they can dream up at the time. Oh, and then there is a new ‘Anniversary Day’. What a nice little gift that is. As far as I can see, it means there will be no ability to bring forward an FDS/Opt-in to align with a review if a client comes in prior to the anniversary day. So unless the client magically comes in during a short window each year, we are going to be posting out these fee consent forms and following them up. Make a mistake….5 years jail. What the f@#$ is going on in this country??
This was clear and Has been implemented 18 months ago by businesses who choose to engage not wait to be told. With one consent for ongoing fees.
move to flat dollar… it is obvious… your services are fixed… how can u justify a percentage based fee in this world now
So let me get this straight, to remain compliant a client needs to see the advice fees associated in all of the following documents (in order):
Letter of initial engagement, statement of advice, ongoing service agreement, written consent form, FDS and opt-in. Rinse and repeat. We’re at a point where we have to charge clients more in order for us to tell them what we’re charging them in 6 different ways.
Not at all confusing for a client, why on earth can this not just be replaced with a single invoice document that a client agrees to at each review every year!?
You forgot to mention any extra documents Fund Managers need if you are not invoicing the client directly.
Like a single ATO approved Roll Over form.
Come ASIC, do just 1 thing in your existence right and have a single accepted Adviser and Platfrom FDS.
ASIC and Pollies please, please, please stop the multiplication of admin over and over and over again.
MIND NUMBINGLY PAINFUL !!!! And bloody costly.
It is what happens when a single person like a senior lawyer can singlehandedly decide the entire course of an industry without any checks and balances.
The last 4 of those 6 can actually be replaced with a single invoice document that a client agrees to each year. It’s the way many practices are going, and ultimately what the regulators are trying to force.
Unfortunately it removes some benefits for clients such as:
– paying for super advice from super products
– reduced GST when fees paid via platform
– advice fees included in platform tax statement for simpler tax deduction admin
This legislation is absolutely insane as we are stressing out yearly delivering CSA documents that reflect to service fees deducted from those accounts. What are they thinking?
So this has now set in stone the duplication for advisers in having clients sign multiple forms for the same fee to meet AFSL and Trustee obligations.
More REGS, more RED TAPE COSTS, Ever Increasing Costs of Advice !!!!
Great job pollies and ASIC continuing to make Advice out of reach of most Australians.
You say one thing to want to reduce costs and that comes out as the complete opposite action.
Beyond moronic is this !!!!!
I notice that the consent examples covers more than 1 year ( 1 Jan 2021 – 1 Jan 2022) that is 1 year and 1 day. I assume ASIC will be lodging a breach report. But who would follow that up?
ASIC will say it was a mistake and pay it back without any issues if the adviser does it AFSL enforceable undertaking fine 11 million
Will ASIC address trustees limiting fees based on client balances?
You can’t be serious ?!