The Financial Planning Association has said it is "concerned" with a part of the Australian Securities & Investments Commission's final guidance on fee disclosure.
Today the corporate watchdog handed down guidelines that tell Australian financial services licensees how to follow new fee disclosure rules that are part of the Future of Financial Advice (FoFA) reforms.
Brought in under the Federal Government's Stronger Super reform of Australia's retirement system, the FoFA regulations stamped out most commissions to make sure financial advice was fair.
Financial Planning Association (FPA) boss Mark Rantall released a statement that said the organisation is concerned that advisers still need to give existing fee-paying clients annual disclosure statements.
Rantall said fee disclosure statements for clients that were already paying a fee-for-service was "cumbersome" and created extra costs for advisers by duplicating workloads.
"We would argue for further discussion and a quick resolution to the downside consequences of this approach in its current form," Rantall, the boss of one of Australia's biggest financial advice professional groups said.
Under the financial advice reforms, fee disclosure statements are meant to let clients know if the fees they were charged by an adviser were fair compared to the services they received, the Australian Securities & Investments Commission (ASIC) said.
The guidelines also set out three areas where ASIC is prepared to show some leeway to planners, to help them transition into the new regime, which has completely restructured how many of them charge fees.
Rantall said that the FPA was happy about ASIC's "no-action" areas, which he said was a pragmatic way to deal with breaches of the new rules that were not deliberate.
Overall, Rantall said that ASIC's guidelines were a "commonsense" approach to the new fee disclosure standards that his group's members will have no choice but to follow from 1 July this year.
ASIC Commissioner Peter Kell said while ASIC would show some leniency for the first year of new rules, after that there would be "stronger regulatory action," taken against deliberate breaches.
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