ASIC tips highlight onerous new FDS regime
Guidance provided by the Australian Securities and Investments Commission (ASIC) around its new fee disclosure regime has highlighted the onus placed on advisers to act promptly when clients for any reason opt out or don’t fill in their paperwork.
In a guidance document titled ‘Tips for complying with fee disclosure and renewal notice obligations’, the regulator made it clear that if a client terminates an ongoing fee arrangement (OFA) by opting out or by not returning a signed renewal document “you need to stop charging them fees under the OFA”.
What is more, it makes clear that it is the adviser’s responsibility to stop such arrangements where fee deductions are occurring via platforms, including checking that they [the platform] had actually turned off the fees.
It said that where clients were charged through fee deductions on the part of a product issuer or platform provider, it was wise to implement processes to reduce the risk of non-compliance including providing instructions to third party product providers and platform providers to turn off fees.
ASIC is also recommending that advisers run regular reconciliation and exception reports comparing their incoming fee revenue from the fees they should be receiving from OFA clients.
It said this might help advisers detect instances where clients’ fees had not been turned off and required further investigation.
Recommended for you
Australia’s largest licensee has seen the biggest number of adviser losses over the past week, while the expected wave of new entrants has boosted overall adviser numbers.
Iress has increased its forecast adjusted EBITDA by $5 million for the 2023/24 financial year in light of the sale of its platform business to Praemium and hinted at a return to dividend payments.
With just 30 per cent of Australians knowing their superannuation balance to the nearest $1,000, Findex has emphasised the role of financial advice in addressing the critical super knowledge gap.
New Insignia Financial CEO Scott Hartley has detailed the impact of the Godfrey Pembroke exit and the progress in resetting its financial advice model on its latest quarterly results.