Client Fee Consent & Fee Consent Renewal
Client Fee Consent
As you are aware, advisers must obtain written consent from clients before they can deduct, arrange to deduct, or accept the payment of fees under an ongoing fee arrangement.
Upon review of the new legislation that came into force, effective 1 July 2021, we have been provided legal advice that as it pertains to Dash Technology Group (DTG):
- The new legislation pertains only to Super Simplifier clients (both MDA and non-MDA).
- Non-Super clients are exempt from the new legislation.
This new legislation is a direct result of the Hayne Commission, which identified problems with clients being charged for financial advice services that had not been provided, which were found to be most acute for ongoing fee arrangements. Thus, measures are now in force to provide further protections against future fees for no service conduct, revolving around advisers obtaining annual fee consent renewals from clients.
Fee Consent: Super Simplifier clients established prior to 30 June 2021
If a fee disclosure statement between an adviser and client was established prior to 30 June 2021, and there is currently no fee consent on file for that client, then the adviser must obtain and submit a fee consent is by the end of the ‘transition year’ i.e., 30 June 2022.
This means if no fee consent has been given by 30 June 2022, then no adviser fees can be charged by Dash until the consent is provided.
Fee Consent: Super Simplifier clients since 1 July 2021
For clients who have been onboarded since 1 July 2021, adviser fee remuneration/fee consent is captured by the Client Onboarding process and incorporated into the Super Simplifier application forms generated and populated by the system. Fee consent disclosure is built into the documents i.e., it directly mentions the client does not have to sign the form if they do not want to and they can withdraw consent at any time.
When establishing new client notes, a ‘Fee Anniversary Date’ is populated in application documents. This date is defaulted to be 12 months from the date the forms are generated. The fee consent ceases to have effect up to 150 days after the fee anniversary date for an ongoing fee arrangement. In other words, advisers have up to 150 days after the fee anniversary date to get new signed fee consent forms from the client and provide these to Dash.
Be advised that Dash is obligated to stop charging fees to clients if the adviser fails to send fee consent renewal by the end of the 150 days after the fee anniversary date.
Fee Consent Renewal
For active clients, there is an online tool that allows advisers to send out fee consent renewal via the new UI which are sent to the client via Docusign. This can be done via Details -> Accounts:
Please note: if the adviser wishes to change the fees currently in place, they need to email those changes first to email@example.com
Additionally, advisers can download from the Academy, a fee consent renewal template to populate. It is ideal if advisers use this template or the automated workflow where possible since these already include necessary disclosure for fee consent renewal as required by legislation.
Alternatively, advisers can manually load their own consent documents. Be advised that responsibility lies with the adviser to ensure fee consent documents are in accordance with legislation. At a minimum, the adviser’s document needs to contain information as detailed by ASIC and should look like what ASIC provide in their example here.
Once fee consent renewal has been received, Dash will manually update the Fee Anniversary Date. This will be done for all clients going forward until service for the client ends.
Client withdraws or varies fee consent
A client can withdraw or vary their consent at any time by giving written notice (e.g., by email, text, or any other written form). Under the regulations the adviser must action this within 10 business days of receiving this written notice plus:
- Give written confirmation to the client that they have received the notice, and:
- If a copy of the consent was provided to a third-party account provider, give the account provider a copy of the notice.
Whom does fee consent renewal for ongoing fees apply to?
For now, this pertains to Dash Super Simplifier members only.
What is an ongoing fee arrangement?
This arrangement allows an adviser to arrange for the deduction of fees from a client, for the provision of personal advice, where the arrangement is to be for a period of more than 12 months. From 1 July 2021, legislation came into effect where new requirements were introduced for adviser fee consent and ongoing fee consent renewal. As a fee recipient, advisers must obtain the written consent of clients before they can deduct, arrange to deduct, or accept the payment of, fees under an ongoing fee arrangement.
For clients onboarded since 1 July 2021 when does an adviser need to renew an ongoing fee arrangement by?
Advisers have up to 150 days until after the fee anniversary date to get new signed fee consent forms from the client. For example, assume the fee anniversary date is 28/03/2022 however the adviser has until 25/08/2023 to get new signed consent forms i.e., 150 days after the 1-year fee anniversary date.
How can an adviser renew an ongoing fee arrangement?
There are one of three ways:
- Using the Dash online tool to generate the form that the client can Docusign.
- Downloading the Dash fee consent form via the Academy and populating this manually.
- Loading their own consent forms – as mentioned, the adviser needs to ensure the fee consent documents are in accordance with legislation.