How Your VBP FPA Can Help
The financial advice industry is constantly evolving, with regulatory updates designed to enhance transparency and improve client outcomes. One of the most significant recent changes is the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024, which took effect on 10 January 2025. A key focus of this amendment is the refinement of client consent requirements for Ongoing Fee Arrangements (OFA), streamlining the process for both advisers and clients.
Understanding these changes is crucial for financial advisers, as they impact how ongoing fees are structured, disclosed, and renewed. In this article, we’ll break down the key updates and explore how your VBP Financial Planning Assistant (FPA) can help you navigate this transition efficiently.
Key Changes to Ongoing Fee Arrangements
1) Removal of the FDS Requirement: ASIC has eliminated the necessity for Financial Disclosure Statements (FDS), streamlining the compliance process for advisers.
2) Definition of Advice: Trustees are now only permitted to deduct advice fees classified as “Personal Advice”. Fees for “General Advice” cannot be deducted.
3) Client Renewal Timeline: Clients can accept renewals up to 60 days prior to the anniversary date and up to 150 days post-anniversary date (an increase from the previous 120 days). This is referred to as the Next Anniversary Date (NAD).
4) New Client Consent Requirements: The updated process mandates that the following information be provided to clients:
a) A clear explanation of why consent is being sought.
b) The maximum duration for which consent will remain effective.
c) A description of the services the client will receive over the next 12 months.
d) An estimate of each ongoing fee and its frequency.
e) The total service charge, which must be included on the platform fee form.
5) Termination of Arrangements: If consent is not signed within 150 days after the anniversary date, the arrangement will automatically terminate. Advisers must ensure that clients receive renewal notifications 60 days prior to the anniversary date.
How Your VBP FPA Can Support You
With these changes in place, it is a great time for VBP FPAs to assist you in other administration tasks. Here’s how your VBP team members can support your onshore teams:
New Client Fee Consent Forms: Preparing and managing consent documentation for new clients.
Follow up of signed forms: Ensuring clients return signed forms within the required timeframe.
Platform follow up: Coordinating with platform providers to ensure seamless processing.
Implementation Follow-up: Assisting with the implementation of fee arrangements and following up on client applications and lodgements.
Support for SoA Presentation Meetings: Helping you deliver comprehensive and clear information to your clients through accurate form preparation for adviser’s SoA meetings, with final checks conducted by your onshore team.
By working with a VBP FPA through these regulatory changes, you can streamline your processes, maintain compliance, and continue providing high-quality service to your clients.
Get in touch with us today to explore how we can support your business in efficiently adapting to these updated regulatory requirements.
