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.
Comments
Asgard / BT are clearly doing their best to totally screw advisers every which way possible.
Advisers need to vote with their clients and stop sending any new business to Asgard / BT.
Their Arrogance and Anti Adviser approach needs to be shown is not acceptable.
These Admin Platforms seem to very easily forget it’s Advisers that have recommend their clients use the products.
Send the message.
NO NEW ADVISER BUSINESS !!!!
So if my clients wants advice regarding their super and requests to pay it from their super (which is legally allowed), then I'm forced to rollover their super to another fund that permits this. So the client fee needs to increase to cover this work. And somehow this is meant to meet Best Interest Duty??? Well done Asgard on making advice even harder to obtain for clients!
What a disgrace.
The platforms now clearly believe the relationship is between themselves and the client and not the adviser and the client.
The platforms are treating advisers like second class citizens and simply wasting them with no consideration whatsoever.
Other platforms are planning to do the same and platforms are doing more to keep platform users on their platform regardless of financial advisors' recommendations. Platforms now offering much more data to platform users, particularly useful to the self managed, and cutting costs to be competitive with competition platforms. Greater interest in non-Australian investments is being facilitated by platforms.
The changing times of global economic order, the rise of Fin-Tech, robo-advice, bitcoin, Chinese trading actions and reactions, and much more offers good opportunities for qualified sophisticated financial advisors to bring sense of these developments to their clients. They won't need to be constrained by platform fees.
If I know the people at Asgard (and I do), this opinion will be the excuse they thought up so they didn't have to put money into changing the system to allow a time limited ongoing fee.
Platforms are now the newest additional de-facto regulator where regardless of the commercial relationships that advisers may have with their clients, they can determine whether you are paid or not.
Some will even be requesting your SOA as proof. This document may contain other information and strategies for the client but the platform regulator now gets to see it and assess it.
Will they be determining best interest as well?
Is this not a breach of privacy between the adviser and the client?
And what will be the qualification of the platform assessors? Will they be FASEA qualified, lawyers or retrained call Centre clerks?
And worse still, what if you upset them, will the platform cut your access and fees?
Who will really own the client going forward?
And where will the adviser get recourse?
Who actually will police the platforms?
Are the platform parent companies ethical?
What do the FPA and AFA think?
I suspect Self Managed Super Funds (where the SMSF Trustee & the adviser jointly control the fee collection mechanism) are going to boom even more than they have, from now on.
Perhaps. But this has all come about due to pressure put on the platforms by regulators. There is potential for similar pressure to be applied to SMSF auditors. It would not surprise if SMSF auditors are soon compelled to ask for proof that any advice deduction has been authorised by all impacted fund members, and relates only to superannuation advice.
Never underestimate the potential for biased regulators to put barriers in the way of consumers trying to access professional financial advice. They have been very successful at it so far.
All completely crazy unknown crazy duplication 2nd Layer AFSL and by whom is this done ?
No detail, no information, hastily implemented.
Utter madness Hayne RC / Frydenberg / Hume / ASIC / Pollies, driving Advisers into the ground.
By July 2022, the Asgard system should be inside Panorama, which does allow at time limited monthly fee.
Asgard's upgrade over the weekend allows a set date for the consent form, so I can't see why it can't be extended beyond 1 year (if legislation was so amended).
Well Asgard and BT might as well exit the industry now.
They are as good as finished.
They clearly have no interest in servicing advisers and their clients.
Do they even know who their clients are?
No, they do not know who their client's are.In fact they are not their " clients", they are just a number and a name.
They know nothing about them other than their account balance and investment options.
They don't know their personality, their needs, their fears, their family back story, their investment risk attitude, their liabilities and debts, the age of their children and their health history.
They don't understand what they love, what they dislike and what pushes their buttons.
They don't understand where they live, their sense of community and what they really value.
Advisers know these things and this is what a client relationship and trust is all about.
Platforms are driven by FUM and not people.
Their members are faceless individuals with a number and a balance.
To advisers they are real people with fears, concerns, habits, dreams, dying parents or children, over whelming illness, a need to confirmation they are doing the right things to achieve their goals and demonstration that someone cares about them as people first, second and third.
Advisers do this and this is where the value relationship exists.
The relationship between a platform or fund is simply a transactional function.
These platforms that are taking over control of the client relationship is driven by greed and control...nothing else.
They will then market consistently to advisers clients repeatedly and subliminally suggesting that fees can be turned off at anytime.....they want to cut advisers out of the picture...there is no doubt whatsoever.
They know nothing about the client and yet are tasked with acting in the members best interest !
How do they know what is in the members best interest if they know nothing about the members ?
This is a stitch up and these massive businesses are out to steal and thieve the relationship and will use legislation as the reason.
They are all appalling.
Will accept the business advisers place and then steal it from you.
A well stated case for advisors!
It seems these product providers have forgotten where they get clients from. They are trying to push us out and keep the clients too the sneaky buggers. They offer online access, and the ability to transact for ones self for example. Thing is clients have us as they want us to direct them. They want one person to deal with, not 200 in a call centre. These instos really underestimate the relationship we have with our clients. They move on things that are not legislated, but them moving first forces the rest of the market to follow and its a real sneaky way of saying to the govt yes pass that we have already acted on it anyway. They are evil. However they do it at thier own peril.
Asgard shut down advice fees and BT Life switch off commissions ,,, this business is being set up for sale. Get out whilst you can still control your clients arrangements.
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