Insights for advisers, by advisers

Limited relief offered for ‘unworkable’ FDS requirements


By now every adviser, licensee and paraplanner would be well aware of the impending changes to annual opt-in, consents and ‘lack of independence’ disclosures. Combine these with the impending product design and distribution obligations (DDOs) and varying fee consent requirements from every platform, and a busy year lies ahead for those advisers that remain.

Late last week the federal government offered some relief, after an outcry from almost all the major professional associations supporting financial advisers. Under the current legislation, a transitional provision applies for the period 1 July 2021 to 30 June 2022 which meant that a client must be provided with a new format fee disclosure statements (FDS) before 30 June 2022 and that this date effectively reset the anniversary of disclosure date.

Minister for Superannuation, Financial Services and the Digital Economy, Senator Jane Hume, announced last week that the requirement to accurately disclose all fees up to the day the new format FDS is issued would be waived for the transition period. This followed concerns about the near -impossibility of being able to bring together fee information from multiple sources, collate this and deliver it to every client in a single day.

The relief provided means that advisers will have 60 days to provide clients an ‘estimate,’ rather than specific amount of the fees they will pay prior to issuing a new agreement from 1 July 2022, effectively covering-off on the additional period between their anniversary and 1 July. Advisers would then have to report the estimate along side the actual fees charged for the remainder of the previous 12 months.

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