What does the End of the Financial Year mean?

AFA News 30 June 2022.  The most important trigger marked by 30 June 2022 is the deadline for the submission to product providers of client consent forms to enable the ongoing payment of adviser fees under ongoing fee arrangements to continue.  Financial advisers/licensees and product providers will need to turn off fees if the consent form is not received by 30 June 2022.  Technically the obligation rests with the fee recipient (licensee/adviser) to not arrange for the deduction of fees or to accept fees in the absence of this consent.

Under the Annual Renewal regime, financial advisers had 12 months until 30 June 2022 to both issue the new Fee Disclosure Statements to existing ongoing fee clients and to get the client to complete a consent form for each relevant product.  If the new FDS has not been provided to the client in the transition year by 30 June 2022, then the ongoing fee arrangement is terminated, and advisers need to turn the ongoing fees off.  If an adviser has provided the new FDS within this period and the client is yet to sign the renewal or client consent forms, however, the 120 days for renewal has not expired, then the fees will still need to be turned off from 1 July 2022.  Technically the ongoing fees could recommence once the client has completed the renewal process (provided it is within the 120-day permitted period) and the client consent forms have been provided to the relevant product providers.  Once again this is the responsibility of the fee recipient (licensee/adviser).

Advisers should give consideration to whether they have any clients where the fees need to be turned off for any of the reasons discussed above.

Other important factors marked by the end of the financial year include:

  • For many advisers, it is the end of their CPD year and they need to ensure that they have met their CPD targets, both in aggregate and across each of the FASEA CPD categories.
  • 1 July 2022 also marks the point where the SGC increases from 10% to 10.5%.
  • Changes apply to the application of the work test for non-concessional contributions for those between the ages of 67 and 74.

Issued 30.06.2022. AFA Policy & Education Update