The corporate regulator has released three legislative instruments dealing with advice fee consents and independence disclosure as part of the passing of the Financial Sector Reform (Hayne Royal Commission Response No.2) Act 2021.
The Australian Securities and Investments Commission’s (ASIC’s) instruments aimed to minimise regulatory burden for the financial advice and superannuation industries and to ensure consumers receive relevant information.
The instruments set the requirements for:
- The written consent that a fee recipient must obtain from a client before deducting, or arranging to deduct, advice fees from a client account as part of an ongoing fee arrangement (Recommendation 2.1);
- The disclosure of lack of independence that an Australian financial services (AFS) licensee or authorised representative must give clients where they would breach s923A of the Corporations Act if they used words such as “independence”, “impartial”, or “unbiased” (Recommendation 2.2); and
- The written consent that a superannuation trustee must obtain from a member before deducting advice fees from a superannuation account under a non-ongoing fee arrangement (Recommendation 3.3).
ASIC noted it did not have powers to provide exemptions from the new advice fee consents and independence disclosure retirements or to modify how the requirements applied.
“ASIC can only specify requirements for the advice fee consents and the form of the disclosure of lack of independence,” it said.
Comments
This all needs to be made as simple and as paperless as possible. Clients do not want more paperwork, financial planning businesses do not want more paperwork and super funds do not want more paperwork.
Only bureaucrats, and a supposed Liberal government, want more paperwork.
Of course bureaucrats want more paperwork. We bureaucrats are all greenies at heart and want to preserve the environment by forcing people to plant more trees to capture CO2 gases. The best way to do this is force people to use more paper...... Pure genius!
A new change every week. As an ASIC manager people don't understand how stressful my job is. You have no idea how hard it is to keep 1000 people in ASIC employed every week. I have to spend hours every week making up new regulations to be implemented to improve things!
I feel for you mate. Happy to buy you a beer some time!
Dear ASIC, I signed up for ASIC notifications. However I didn't get this email. Any chance I could get a refund on my ASIC levy please?
So, as a client, are you saying that completing the adviser remuneration part of the Platform application doesn't instruct a trustee to deduct adviser fees? Do I now have to write a letter to the Platform provider as well? Please let me see the 50 page document which explains what I now have to do to effect this.
Just read the ASIC "guidance".
So, currently, for a new client we rebate 100% of insurance commission and charge a fee, our licensee has no product ownership or rebates and no conflicts or association with a bank - it is 100% owned by advisers. However, we have clients with insurance paying a commission which we are unable to turn off and it's too costly from an admin point of view to rebate, so I need to tell a new client, who we are paid 100% by via fee for service, that we lack independence because we receive commission for someone else's insurance policy that has nothing to do with them. I can already see the look of disbelief from the new client as to why I'm telling them this as it makes no difference to them in the slightest - except to cast doubt in their mind they maybe there is something I'm not telling them.
It's also great to see ASIC introducing more jargon for clients to understand "non-ongoing fee"...why not just say "one-off fee"?
I think it's time to review all clients and stop charging via product, for those who can't pay any other way we'll have to charge an admin fee for the added BS of completing all the necessary forms and managing the renewals etc.
[insert slow clap here for ASIC].
This Federal Liberal Govt is beyond inept.
A client comes to see me a week before their fee consent anniversary. According to ASIC, I can't get them to sign the annual consent form while they are with me. Instead I have to post it out a week later and waste our time and the client's time following it up. Honestly, what the f.... is wrong with ASIC?
It's quite clear ASIC wants advisers to move to only charging one-off fees. To offer "ongoing fee" arrangements involve far too much regulatory red tape, forcing the client to pay higher fees, which financially is not in the clients' best interest. Clients paying comparatively higher adviser fees (due to ASIC's ongoing fee red tape) would amount to a potential breach of Standards 2, 5 & 7 of the FASEA Code of Ethics...lol
Sooo Funny.
ASIC says it is aiming to minimise the regulatory burden. haha
Lucky they are not in the Olympics. Missed the target by a country mile. Very funny
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