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Quarterly compliance update


Below is a summary of the important changes to be aware of so you can continue to meet your compliance obligations.  If you have any questions relating to this update, or any other compliance related matter, please contact Geoff Byrnes.

Changes in legislation
  • On-going Advice Fee Arrangements commence 1 July 2021
  • Charging MySuper accounts new requirements commence 1 July 2021
  • Independence Disclosure new requirements commence 1 July 2021
  • FASESA Code still active but no Disciplinary Board…yet
  • New Act AFSL variation to manage insurance claims passed 17 December 2020
  • ASIC CP 335 Consumer Remediation due 26 February 2021
  • ASIC CP 332 Promoting access to affordable advice for consumers due 18 January 2021
  • ASIC CP 333 Reference checking and information sharing protocol due 29 January 2021
Ongoing Fee Agreements (OFAs)

The Act requires Ongoing Fee Arrangements (OFAs) to be renewed annually (rather than every two years).

Fee Disclosure Statements (FDS) should be forward-looking in respect of fees and services.

Written consent should be obtained before advice fees are deducted under an OFA.

There is a removal of the requirement for advisers to separately give clients a renewal notice.  This will be replaced with an enhanced FDS, which must:

  1. Include the fees that will be charged in the upcoming 12-month period
  2. Outline the services which the client is entitled to receive in that period
  3. Seek annual renewal from clients for the OFA

A new concept of ‘anniversary day’ has also been introduced, with many of the key requirements in relation to renewal and consent being linked to this concept.  The anniversary day is the anniversary of the day on which the relevant OFA was entered into.  The ‘renewal period’ within which clients renew the OFA is a period of 120 days beginning on the anniversary day. FDSs must now be given to clients within the first 60 days of this 120-day period.

A client’s consent to the OFA will terminate, generally, at the end of a period of 150 days commencing on the anniversary date.

Effective 1 July 2021, for OFAs entered into on or after that date.  There are transitional provisions applying until 1 July 2022 in relation to OFAs in force immediately before 1 July 2021.

Education requirements

Please make sure you are completing 10 CPD points every quarter (e.g. 10 points by the end of March 2021) to keep up to date with the required hours.

This is mandatory and you need to ensure that you are completing your required outlined subjects as well.

Registers

Please ensure that you are completing the required registers i.e. complaints register, breaches register, securities register, marketing register etc.

This will be required when the audit is requested. If you do not provide it, it will be noted that you do not have one in place and will be considered a breach.

Your audit

Every year we conduct an audit and provide a report on this.  When this audited is requested, please ensure that you provide ALL documentation.

Document required includes all file notes, fact find information, research, documentation and basis for your advice, the Statement of Advice, Records of Advice, application forms etc.  This is a requirement and is compulsory.

 


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