Australian Financial Services Licensing (AFSL) Forum

#3169 Reply

Megan Jaksa
Member

Hi James,

Advisers must disclose to retail clients remuneration or other benefits that might reasonably be expected to be capable of influencing themselves, their corporate authorised representative (if applicable), the licensee, and other parties. However, you’re correct in saying that there is no specific requirement to include the recommended product fees in the SoA.

As you know, PDSs and FSGs often include examples to illustrate the impact of various fees. Although some disclosure can be ‘incorporated by reference’, statements of advice must still be clear, concise and effective.

ASIC’s interpretation of the new ‘best interests’ provisions requires advisers to help clients to be in a ‘better off’ position. We think a consideration of product fees is a significant component of this process and should be clearly explained.

If you require further information, please don’t hesitate to contact our financial services team.

Kind regards,

Author: Paul Derham

Co-contributor: Megan Jaksa

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