Australian Financial Services Licensing (AFSL) Forum

Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
  • #3023 Reply

    Hi Members

    Is it the case that unless the advice involves a product replacement recommendation, there is no requirement under the Corps Act to disclose the product fees related to the advice (unless associated with the providers remuneration)? If that is the case, is it fine to simply refer the client to a PDS / FSG to wade through and attempt to calculate the fees (think ICRs, tiered admin structures etc)?

    Perhaps I’m still in the minority, but I would have thought any client would have an interest in knowing all costs associated with the advice they have received in a simple and easy to understand format, notwithstanding that some of those fees are not paid to the advice provider. Even if there is not a strict legal requirement to disclose product fees, is there a danger that a client could dispute the advice if these fees are not disclosed in an advice document?

    I’m interest to hear other member’s views on this issue and also whether the best interest safe harbour possibly changes the position (eg ‘take any other step….’).



    #3169 Reply

    Megan Jaksa

    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

Viewing 2 posts - 1 through 2 (of 2 total)


Reply To: Disclosure of Product Fees

Your information:

<a href="" title="" rel="" target=""> <blockquote cite=""> <code> <pre class=""> <em> <strong> <del datetime="" cite=""> <ins datetime="" cite=""> <ul> <ol start=""> <li> <img src="" border="" alt="" height="" width="">

  • Free answers to common Financial Services Regulation (FSR), Consumer Credit and AML/CTF issues.

    Click here to join our LinkedIn group for responsible managers and compliance professionals.
  • Training

    Regulatory Compliance Training for Directors, Responsible Managers and Compliance Staff

    View Courses

  • Legal Advice

    Review your AFSL or ACL disclosure documents, conduct a licensee audit and more…

    Get Legal Advice

  • Compliance support

    The HN Hub – an online platform built to support Responsible Managers and Compliance Staff