Financial advisers using 12-month agreements renewed annually without issuing a fee disclosure statement (FDS) have been cautioned they may be at risk of breaching the anti-avoidance provisions of the Corporations Act.
The warning has come from BT platform Asgard in an information notice to advisers outlining its changes to advice fees consistent with the upcoming end to grandfathering.
Advisers who have received the Asgard information are claiming that it is inconsistent with other interpretations, particularly around the ability to charge one-off fees with respect to MySuper accounts, although Asgard did acknowledge the ability of advisers to charge a one-off fee.
The Asgard document, a copy of which has been obtained by Money Management, also makes clear that advisers cannot avoid the underlying paperwork by focusing on servicing wholesale or sophisticated investors.
It said that although the consent requirements do not apply to wholesale or sophisticated investors in relation to their investment accounts, they do still apply with regards to their super accounts.
“In the interests of ensuring all clients are aware of and agree to the fees deducted from their accounts, we will require wholesale and sophisticated investors to follow the same consent process as retail investors,” the Asgard document said.
“Asgard does not currently support fixed-term fees, and we are not introducing this capability as part of these changes,” the document said. “You are able to charge a one-off fee.”
Outlining which fees will no longer be able to be charged, the Asgard document stated:
“In addition to the removal of Grandfathered fees the following fees will be unavailable from 13 December 2020 on Asgard:
-Upfront fee for regular buy;
-Auto Invest Excess Cash Upfront fee;
-Asgard eWrap Managed Fund Buy fee;
-Asgard Regular Direct Deposit Plan fee;
-Transfer Fee-One-off Deposit fee (excluding Initial Deposit fees);
-One-off Transfer in Transfer Authority fee;
-Variable Adviser Service Revenue;
-AESA Ongoing Advice fee; and
-AESA One-off Adviser fee on MySuper accounts.
