When the “opt-in” requirement applies, and whether it covers insurance
The opt-in requirement applies to ongoing service agreements that have been entered on or after 1 July 2013. An FDS must be given within 30 days after each anniversary of the agreement, and an FDS and (opt-in) renewal notice within 30 days of each second anniversary of the agreement.
In other words, from the month of July 2015, a company will need to identify the ongoing client agreements that have been entered in that month two years previously and ensure that a renewal notice is sent (with an FDS) to each of those clients within 30 days of the second anniversary of the agreement. This obligation to send a renewal notice then continues on every second anniversary of the agreement after that.
These requirements apply when the client has an ongoing service agreement. That is, an arrangement under which a company gives personal advice to a retail client and a fee (however described or structured) is to be paid during a period of more than 12 months. The Corporations Act specifically excludes arrangements under which the only fee payable is an insurance premium. (s962A)
It follows that if a company’s advisers have clients that hold insurance policies and the only service provided by the adviser is to act as a go-between in the payment of insurance premiums, then the opt-in requirement does not apply. The receipt by the company of trail commission does not trigger opt-in requirements because it is not paid by the client.