Changes to advice fees

The advice community is going through the most significant period of change since the 2013 FoFA reforms. The findings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (Royal Commission) has led to the raising of the bar in all facets of the advice process.

The Royal Commission made a number of recommendations, including changes to the way financial advisers can charge certain fees to their clients. It is currently proposed that from 1 January 2021, ongoing fee arrangements which advisers have in place with their clients will need to be renewed on an annual basis, and advisers must obtain written consent from their clients before any advice fees in relation to the ongoing fee arrangements can be deducted. Fee disclosure statements (FDS) must be enhanced to include information on the fees to be charged and services to be provided in the coming year, as well as information about the previous year. The new process will apply to both Super and non-Super/IDPS products.

We fully support the move towards full transparency around fees and believe that fee transparency safeguards client interests. This is why we are moving to implement the Government’s proposed client consent framework as soon as we can. We will implement changes to advice fees on Wrap and Asgard by 1 January 2021.

We recognise that these changes will create challenges in your advice practice as we all adapt to the new framework. Your processes for issuing fee renewals and collection of client consent may need to change. 

We are building solutions that make it easier for you to monitor your clients fees,  renew them when they are due and get your client’s consent to fees:

• On Panorama, we are taking additional time (legislation permitting) to build out our seamless digital customer experience and consent capability to make it possible for your clients to convineniently agree to fees online as well as through our award-winning mobile app. We expect to make this capability available by 31 March 2021.
• On Wrap, we are updating our our forms and processes for setting up and amending advice fees.  These forms will be available in December, with online changes being made on the 19^th December 2020. We will accept existing forms up until 31 December 2020. As part of the proposed Wrap to Panorama migration, you and your clients will also enjoy all the benefits of our Panorama solution. If a client consents to a fee on Wrap, that concent will also apply to their account after it is migrated to Panorama.
• On Asgard, we are updating our forms and online services for setting up and amending advice fees. You'll see updates to fee screens in AdviserNet from 13 December. Unfortunately we are unable to accept existing forms after this date.
  

We’re monitoring legislative developments regarding consent for existing ongoing advice fee arrangements and will provide more details as the become available.