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Advisers risk penalties with FDS deadline

Financial advisers may be risking ASIC penalties by waiting for proposed FOFA amendments to pass instead of submitting fee disclosure statements (FDSs), according to a financial services lawyer.

Speaking to ifa, The Fold legal managing director Claire Wivell Plater explained that by June 30, advisers should have completed their first round of fee disclosure statements; however, many may be waiting for proposed FOFA amendments to pass instead.

“The question is what view ASIC will take about those breaches,” Ms Wivell Plater said.

“Will it subsequently say to people: you didn’t do it and the law said you needed to, and it wasn’t good enough that you were waiting for this proposed repeal because there was never any certainty that it was ever going to come through?”

Ms Wivell Plater said that if the amendments proceed, FDSs will only need to be provided to clients who were first advised after 1 July 2013.

“But, by 30 June 2014, advisers would have already provided an FDS to their pre-1 July 2013 clients if they’ve complied with the current requirement,” she said.


Ms Wivell Plater said that she couldn’t be sure on the penalties advisers would receive for not having submitted FDSs as it would largely depend on what “ASIC will do”.

“ASIC did indicate that it wouldn’t take action against some for not complying given that the amendments were imminent,” Ms Wivell Plater said.