ASIC consults on advice fee consents and independence disclosure

Australia’s corporate regulator is seeking public input on proposals about advice fee consents and independence disclosure, ahead of the proposed date of commencement of the law reform in July.

The proposals were based on a series of recommendations made by the royal commission to address consumer harm resulting from fees for no service, inappropriate advice fees, and poor advice.

The Australian Securities and Investments Commission (ASIC) said the industry and stakeholders have until April 07 to provide their feedback on:

• draft legislative instruments that deal with advice fee consents and independence disclosure, and
• a proposal to issue more guidance in Regulatory Guide 245 Fee Disclosure Statements (RG 245) to help industry meet obligations around ongoing fee arrangements, including renewal notices and fee disclosure statements.

ASIC’s draft legislative instruments will require financial advisers to provide:

• a written consent to deduct, or to arrange to deduct, fees from a client account as part of an ongoing fee arrangement,
• a written consent to deduct fees from a superannuation account under an arrangement that is not an ongoing fee arrangement, and
• a written statement that discloses advice providers' lack of independence

ASIC also consults on additional issues relating to ongoing fee arrangements, including renewal notices and fee disclosure statements, and is proposing to update RG 245 in mid-2020.

“The government proposes to introduce legislation implementing the royal commission recommendations from July 01, 2020,” said Danielle Press, ASIC commissioner. “We are consulting on our proposals now to help provide certainty to industry as it prepares for the new requirements. ASIC welcomes views not only from industry but from all interested stakeholders. This will help us understand any concerns that consumers, firms, and trustees may have about our proposals.”