Home › Forums › Australian Financial Services Licensing (AFSL) Forum › How does one deal with FDSs and breaches given the law still imposes an obligation to provide FDSs to pre 1 July 2013 clients on ongoing fee arrangements? › Reply To: How does one deal with FDSs and breaches given the law still imposes an obligation to provide FDSs to pre 1 July 2013 clients on ongoing fee arrangements?
Thanks for your question.
According to the Exposure Draft of the Corporations Amendment (Streamlining of Future of Financial Advice) Bill 2014, which was released on 29 January 2014, these types of clients will no longer be captured.
Under the current legislation, clients fall under either Subdivision B or C of Division 3 of Part 7.7A. Subdivision B applies to clients who have not been provided with personal advice as a retail client before 1 July 2013. Subdivision C applies to any clients that are not captured by Subdivision B. Broadly speaking, Subdivision B captures all of your new post-1 July 2013 clients and Subdivision C captures all of your pre-1 July 2013 clients.
The draft legislation repeals Subdivision C in its entirety. As a result, any clients to whom you have provided personal advice as a retail client prior to 1 July 2013, will no longer require a FDS.
Please note that this answer is based on the Exposure Draft and may change if any amendments are made to the legislation. It also assumes that there has been no change to the licensee providing the advice to the client since 1 July 2013.
For further information, please feel free to contact our office.
Author: David Court
Co-contributor Megan Jaksa