We have included an Ongoing Service Agreement page that you may choose to use in your Statement of Advice documents.
The Government has introduced new disclosure obligations which will impact the way you discuss and disclose your fees with your clients. The law creates requires advisers to provide the following additional disclosure documents:
- fee disclosure statement; and
- renewal notice.
They apply to ongoing fee arrangements between advisers and retail clients and will be mandatory from 1 July 2013.
An ongoing fee arrangement is one where you’ve agreed with a retail client that they’ll pay you a regular fee for your advice over a period of more than 12 months. This doesn’t include where you’ve agreed to a payment plan where an up-front fee is paid by instalments.
Opt-in requirements do not apply to existing clients.
What will I be required to do to comply with the fee disclosure obligations?
The fee disclosure obligation requires you to take several key steps, after 1 July 2013:
- On an annual basis, you need to provide all of your clients with a Fee Disclosure Statement (FDS).
This will need to be in writing, and must contain:
- the amount of each ongoing fee paid in the previous 12 months;
- the services your client was entitled to in exchange for that fee; and
- the services your client actually received.
Note: ASIC has indicated that they are preparing industry guidance on the FDS and the Government has the ability to issue further regulations that change the content requirements of fee disclosure statements.