What’s the issue? FDS and opt-in notices

Prepared by Catherine, Peter, Julia & Nicholas.

With ASIC warning that they will be focusing on compliance breaches with FDS and opt-in notices we thought it might be useful to collate some of the common issues we see regarding Fee Disclosure Statements. We asked around the office and this is what our team are seeing as issues:

Peter: “Planners think they are providing advice to wholesale clients without realising that the strategic advice they’re providing renders the client retail and enlivens the opt-in / FDS requirement.”

Julia: “Some planners have insufficient internal systems to enable them to identify the relevant anniversary date for providing each client with an opt-in notice.”

Nick: “Planners sometimes fail to reconcile the services a client is entitled to receive under an ongoing fee arrangement against the services actually performed for the client in a relevant period. Even a slight variance could bring about a ‘fee for no service’ situation which would need to be remediated by the planner.”

Catherine: “The crossover between wholesale and retail clients can be difficult in this space. The complexity arises where wholesale clients have an ongoing fee arrangement that typically would not be covered by the FDS/opt-in requirement but have received superannuation advice during the relevant period”.

If you have any questions or concerns around your FDS or opt-in notice requirements shoot us an email or pick up the phone, we are always happy to discuss.

More details on the ASIC action can be found here: https://asic.gov.au/about-asic/news-centre/find-a-media-release/2018-releases/18-306mr-asic-action-on-compliance-breaches-with-fees-disclosure-and-renewal-notices/