Intra-fund advice fees will be rolled up into administration fees and costs under key changes to Regulatory Guide 97 (RG 97) released by the Australian Securities and Investments Commission (ASIC) today.
The changes will also see a separation of ongoing annual fees and costs and member activity related to fees and costs.
Announcing the changes, ASIC commissioner, Danielle Press said the updated guidance on fees and cost disclosure for issuers of superannuation and managed investment products was intended to help consumers and their financial advisers better understands fees and costs and more easily compare products.
Press also foreshadowed that ASIC would be separately undertaking work on fees and costs disclosure on platform arrangements next year and work with industry bodies to clarify how financial advisers should use fees and costs information when giving advice.
ASIC outlined the key changes with respect to RG 97 as being:
- A re-grouping of values in the re-named fees and costs summary to more clearly show fees and costs that are on-going and those that are member-activity based;
- A simplification of on-going fees and costs into three groups – administrative, investment and transaction;
- Including a single ‘Cost of Product’ figure in a PDS; and
- Simplifying how fees and costs are presented in periodic statements.
It said that, as well, the guidance and associated legislative instrument had been drafted to make the regime more practical for industry and promote compliance by issuers with their legal obligations.
- The guidance has separate sections dealing with superannuation and managed investment products;
- Modification of the legislation has been done by way of a legislative instrument that includes a consolidated version of Schedule 10 of the Corporations Regulations 2001; and
- The costs categories that need to be counted in the disclosed amounts have been clarified, including confirming that some categories that are hard to accurately measure consistently and have limited value for users need not be included (e.g. implicit market costs).