The federal government will introduce a carve out to help financial advisers to meet their ongoing fee disclosure obligations.
Senator Jane Hume announced this evening that advisers will have 60 days to provide clients an estimate of fees they will pay prior to issuing an annual advice agreement from July 1.
"The estimate would be reported alongside the actual fees charged for the remainder of the previous 12 months," she said.
The relief is applicable only for the transition period of 1 July 2021 to 30 June 2022.
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After the transition period, financial advisers will have 60 days from the anniversary date to issue their fee disclosure statements (FDS), which must report all fees paid in the previous 12 months.
Prior to the carve out, industry associations have decried the practicality issues of the new annual renewal law, arguing that it was impossible to generate a financial disclosure statement in one day.
They identified a number of practicality issues that include delays in processing fees; not having enough time to accurately check the FDS and to check it against product systems.
Hume said the government will continue to work constructively with industry to provide an enhanced regulatory framework for financial advice that reduces costly red tape on industry and maximises outcomes for consumers.
The financial services Royal Commission recommended the annual renewal obligations in a bid to stamp out the fee-for-no-service problem that plagued the advice industry.