AFA News 17 June 2021. On Friday 11 June 2021, Minister Hume issued a media release, explaining how the Government is going to address the issue identified by the AFA with respect to the requirement for financial advisers to issue an FDS during the Annual Renewal transition year (1 July 2021 to 30 June 2022) on the day immediately after the end of the FDS year. Effectively advisers would have had only one day to prepare an FDS during this year, which is impossible.
The Government intends to issue a regulation that will still require FDSs to be issued one day after the end of the period covered in the FDS, however based upon the actuals for the first 10 months of that year and an estimate for the last two months. This will allow advisers to start work on the preparation of the FDS in the 11th month. Whilst not ideal, this is at least more achievable.
Finding a solution to this issue was holding up the release of ASIC’s guidance on the new FDS and fee consent regime, which ASIC issued on Tuesday 15 June, 2021. This FAQ addresses 35 questions across the following three areas:
- Ongoing Fee Arrangements,
- Fee Disclosure Statements, and
- Ongoing Fee Consents.
Members are encouraged to read this FAQ document to assist in understanding the new Annual Renewal obligations.
ASIC have confirmed that they will not be providing a facilitative compliance approach during the transition year as they have no exemption powers and a breach of the FDS obligations will result in the automatic termination of ongoing fee arrangements. It is therefore critical to get this right.
For any questions on Annual Renewal, please email policy@afa.asn.au
Issued 17.06.2021. AFA Policy & Education Update
