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.