Govt announces relief for ongoing fee disclosures

The Federal Government has eased requirements for financial advisers to meet their ongoing fee disclosure obligations to address circumstances where advisers are unable to report actual fees in the required time.

Financial advisers would be allowed to report an estimate of fees for the 60 days prior to the statement being issued which would be reported alongside the actual fees charged for the remainder of the previous 12 months.

The regulation would only apply for the transition period and after the transition period, financial advisers would have 60 days from the anniversary date to issue their fee disclosure statements which they must report all fees paid in the previous 12 months.

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The Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, said the Government would create a regulation that would lower compliance costs for generating fee disclosure statements in the transition year to streamline the process for licensees and advisers.

“As part of delivering Recommendation 2.1 of the Financial Services Royal Commission, from 1 July, 2021, the financial advice industry is required to report the fees paid under an ongoing fee arrangement and provide a reasonable estimate of the fees that will be paid in the subsequent 12 months,” Hume said.

“Financial advisers can issue this fee disclosure statement anytime between 1 July, 2021, and 30 June, 2022, and the date of issue will become the anniversary date for future fee disclosure statements.

“The Government is aware that industry may have difficulties generating an accurate fee disclosure statement during the transition period of 1 July, 2021, to 30 June, 2022, as fees are required to be reported up to the day before the statement is issued.”

The regulation would be made by 1 July, 2021.

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Is this some sort of joke? Relief? This is the opposite of relief. Now we have to report additional information and produce more calculations. Every time ASIC, FASEA or Hume move we sink deeper into this quagmire of red-tape and impossible compliance.

Relief or grief. Now every practice needs to manually calculate the fees for every client. Thanks for the relief government! We really do appreciate it.

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