Compliance with the fee disclosure statement and renewal notice obligations – an Australian case
Publish date: 29 November 2019
Issue Number: 100
Diary: CompliNEWS
Category: General
In Australia a new report about fee disclosure obligations released by its regulator has found that consumers receiving financial advice could be at risk of receiving wrong information about advice fees, or in some cases, being charged fees after ongoing fee arrangements have terminated.
Report 636 'Compliance with the fee disclosure statement and renewal notice obligations' (REP 636), reports on ASIC’s compliance assessments of fee disclosure statements (FDSs) and renewal notices (RNs) issued by 30 randomly-sampled Australian financial services (AFS) licensees and their representatives. The review focused on whether the fee disclosure documents provided to clients complied with the law and if not, the nature of the failures.
The provision of FDSs are important legal obligations for consumer protection that were introduced as part of the Future of Financial Advice (FOFA) reforms in 2013. When they are recipients of fees from clients under ongoing fee arrangements, AFS licensees or their representatives are required by law to provide FDSs and RNs to their clients in a timely manner.
