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ASIC releases ongoing fee arrangements guidance

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The corporate regulator has released an information sheet on ongoing fee arrangements to provide greater clarity to financial advisers and advice licensees on their obligations when providing personal advice to retail clients.

ASIC says information sheet INFO256 follows recent changes to the law that will take effect on July 1. The law changes stem from recommendations made by the Hayne royal commission to address consumer harm resulting from fees for no service and poor advice from financial advisers, whose duty to their client conflicts with their own interests.

INFO256 answers frequently asked questions about the obligations that apply to fee recipients in relation to ongoing fee arrangements, fee disclosure statements (FDSs), and ongoing fee consents.

ASIC says it has taken into account the financial advice industry’s response to its recent consultations to develop the information sheet.

“Industry has asked for shorter, simpler, and more user-friendly regulatory guidance from ASIC,” the corporate regulator said.

“As a result, INFO 256 will replace Regulatory Guide 245 Fee disclosure statements, which will be withdrawn.”

ASIC says it has also released consequential amendments to RG 175 Licensing: Financial Product Advisers-Conduct and Disclosure guide.

The updated guide reflects new advice obligations introduced into the Corporations Act 2001, following the Hayne royal commission. It includes an example of the lack of independence disclosure statement to help advisers understand the requirements in ASIC Corporations (Disclosure of Lack of Independence) Instrument 2021/125.

Click here for INFO256.