ASIC has released Regulatory Guide 245 (RG 245) that outlines new disclosure requirements for Australian financial services (AFS) licensees. As part of the Federal Government’s Future of Financial Advice (FoFA) reforms, fee disclosure statements (FDS) will need to be issued annually to clients who pay an ongoing fee arrangement to an AFS licensee or their representative. These new regulatory obligations are designed to help clients ascertain what services and advice they receive for their ongoing payments.
ASIC RG 245 outlines when AFS licensees will need to provide their client with a FDS and what those statements will need to include.
A FDS will need to be provided to all clients who have an ongoing fee arrangement that lasts for more than 12 months. The FDS will need to be given within 30 days of the disclosure date each year. The disclosure date refers to the anniversary of the day that clients entered into an ongoing fee arrangement. For clients who commence ongoing fee arrangements after 1 July 2013, the disclosure date is the anniversary of the day immediately after the end of the first 12-month period.
RG 245 sets out that a FDS must include the following information:
These FDS reforms will commence on 1 July 2013, however advisers can elect to comply with their disclosure obligations before that date.
We are available to provide you with further information about this issue and other aspects of the FoFA reforms. Please contact us on the details to the right.
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