The reforms, which came into effect on 1 July and include the ability for consumers to give digital as well as written consent to deduct ongoing fees, were discussed at length during Worksorted’s Annual Advice Agreement Summit on Thursday.
Discussing the effect on advisers Kinetic Compliance director Nadia Docker called the reforms “very complex and nuanced and layered”.
“I think that [advisers are] just frustrated,” Ms Docker said.
“They had hoped – and I guess the intention back when Commissioner Hayne had this recommendation to make the fees be disclosed – that it would be simplified.
“I would say that this is one of the more complex pieces of advice we’ve had to coach the clients through.”
ASIC released the legislative instruments for the reforms in March.
For existing customers, new fee arrangements begin on the anniversary day of the previous ongoing fee arrangement. For new customers, fee arrangements 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.
Adding to that, Oreana’s head of advice Belinda Barclay said the changes do “not make a difference to the end client”.
“The lack of logic in this whole thing has been extremely frustrating,” she said.
“I don’t want to throw product providers under the bus, but that’s just been a really challenging area to work with, to understand everyone’s process because everyone’s got an entirely different idea.”
The reforms have also proved to be challenging from a tech perspective both for advisers and developers.
Head of sales at management solution Worksorted, Jarrad Gray, said his team worked to not just understand the reforms, but “break them down”.
“It was even harder than just understanding requirements because we also had to build a system process and ecosystem that could handle people doing it wrong,” he said.
“The system needed to cater for people to back out of doing the wrong thing, producing the wrong document.”
There is one thing we can rely on – the Liberals love red-tape and bureaucracy.
Morrisons, Frydenberg and Hume are fake Liberals. We need a Labor election win so that new people take over the Liberal leadership.
The 12 month consent process has become a complete dog’s breakfast. I gave a client a 7 page (that’s not a typo SEVEN PAGES) consent form yesterday from my licensee, with 21 dot points for the client to agree to. That’s on top of a circa 40 page SOA on it’s way, fact find he must sign and 3 other forms required by the relevant product providers. All for relatively simple advice regarding some minor changes to his investment mix.
Luckily for me the client has a sense of humour. But he left my office under no illusion that this inconvenience is directly attributable to our pathetic Coalition government who refuse to properly engage and listen to financial planners. He is also aware that his fees are going up significantly next year as a direct result of the red-tape and compliance madness. This will be firmly in his mind when he goes to the polls. Ditto the rest of my client base as they come in one-by-one for the same red-tape procession.
More red tape advisers and their clients say thanks for nothing you price taking public servant clowns…
Helping to reduce costs obviously not in your remit?
No helpful actions will be forthcoming whilst the current muppets remain in charge…
When you say the current muppets, I hope you are referring to Frydenberg, Hume and the Liberals.
What a complete and utter mess. There should be just one simple, standardised form for the client to sign. Intended or not, the destruction of an industry continues.
Frydenberg hates advisers and will do anything to kill them to allow banks to flog Robo Advice / Sales.
LNP must be voted out.
And ASIC needs Ms Press gone.
That’s very true. Frydenberg was a bank executive prior to politics and Hume worked for Australian Super. Any financial adviser (or staff member of one) who votes for the liberals is like a turkey voting for Christmas.