RI Advice Group Pty Ltd ABN 23 001 774 125 AFSL Number 238429
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TABLE OF CONTENTS
Important Note ........................................................................................................................................ 3
1.
What is Opt-in and which clients does it apply to?.......................................................................... 3
a.
What is Opt-In? ........................................................................................................................... 3
b.
What is a NEW CLIENT and when does the Opt-in requirement apply?.................................... 3
c.
Opt-In Timeline ............................................................................................................................ 4
d.
Opt-In Scenario table .................................................................................................................. 5
Note: - Where you are seeking to change an existing OFA please discuss this with your licensee to
ensure that the character of the OFA is not changed to the extent it can be considered to be a new
arrangement. ....................................................................................................................................... 6
e.
Opt-In Decision Tree ................................................................................................................... 7
f.
Due diligence requirements to be aware of with bought books of clients! .................................. 8
g.
How we see the process working................................................................................................ 8
h.
Renewal Notice content .............................................................................................................. 8
i.
Identifying clients who are subject to Opt-In ............................................................................... 9
j.
How do you determine the two year anniversary date for the opt-in Renewal Notice? .............. 9
k.
How do you action the responses to the Renewal Notice? ........................................................ 9
l.
Timeline overview of the process? ............................................................................................ 10
How do I implement – XPLAN and non XPLAN?.......................................................................... 13
2.
a.
XPLAN PROCESS .................................................................................................................... 13
b.
Non XPLAN User Process .......................................................... Error! Bookmark not defined.
3. What documentation do I need on file to prove that the client has agreed to renew/continue the
ongoing service arrangement? ............................................................................................................. 13
4. What audit or checking process will be applied and what are the consequences of noncompliance? .......................................................................................................................................... 14
5.
Regulatory ..................................................................................................................................... 14
6.
Questions & Answers .................................................................................................................... 15
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Important Note
This document is provided by the licensee as a guide to the interpretation of the Opt-in legislation. It
is not to be used as a substitute for legal advice. It incorporates both the application of the legislation
and an overlay of licensee business rules to ensure compliance. However, it is a joint responsibility
between the practice and the licensee to ensure compliance with the legislation and we therefore
suggest you may need to seek your own independent legal advice.
1.What is Opt-in and which clients does it apply to?
What is Opt-In?
Opt-in is a requirement, introduced by the government, as part of the Future of Financial Advice
reforms, for all “new clients” paying advisers an ongoing fee.
The requirement is, that in addition to the current Fee Disclosure Statement requirements, from 1 July
2015, advisers will also be required to:
 Send a Renewal Notice every two years with their fee disclosure statement, on or before the
anniversary of the start date** of the ongoing arrangement. You must receive the client’s
consent to the continuation of the fee arrangement in writing before you may continue charging
them for the services you provide (the opt-in requirement)
Note: Clients with “Ongoing fee arrangements” are those who have an ongoing fee arrangement
that lasts for more than 12 months. This is typically an ongoing adviser service fee charged to
support an implied or formal service offer.
Some of your clients will not be subject to Opt-In and are referred to as “grandfathered clients” later in
this document.
What is a NEW CLIENT and when does the Opt-in requirement apply?
A “new client” for the purposes of Opt-in legislation will be:


A client who enters into an ongoing fee arrangement with you on or after 1/7/13: and
A client who has not received personal advice from either you, your practice or your licensee
on or before 1 July 2013.
Any clients purchased or transferred to you as part of an acquisition before or after 1 July 2013 must
be managed separately to determine whether or not opt-in applies to these clients. Applying the
legislation to these clients is more complicated.
Certain fee arrangements are excluded from the requirements. The following are not ongoing fee
arrangements:
1. A payment plan such as an upfront advice fee paid in instalments;
2. an arrangement where the only fee payable is an insurance premium;
3. an arrangement where the fee payable is a product fee;
Please refer to timeline on next page.
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A Scenario Table (pages 5 & 6) and a Decision tree (pages 7) have been developed to help you
identify which clients are/are-not impacted by Opt-In.
Note: References made to either OFA, ongoing fee arrangement, or OGSA ongoing service
arrangement are the same and refer to an agreed fee arrangement the client entered into either
formally or informally for more than 12 months.
**FSP/RI/M3 will use the Fee Disclosure Statement date to meet the above obligation to avoid
advisers having to manage multiple dates.
Opt-In Timeline
FDS – By now every Practice should have;
 Identified which clients had an Ongoing Service Arrangement that was for
more than 12 months whether formal or implied (i.e. you were receiving an
ongoing adviser service fee)
 considered if it was still appropriate to accept an adviser service fee,
particularly if no services were being provided.
 nominated an FDS due date as per the FDS rules provided by your licensee.
 issued an FDS to each and every client within 30 days of the FDS due date on
behalf of your licensee.
2012
1 July 2013
1 July 2015
OPT-IN – From 1 July 2015 Opt-In will apply to all “new
clients”
The obligation to give a renewal notice/opt-in notice (“Renewal
Notice”) will apply as follows:
a) A retail client enters into an ongoing fee arrangement on or
after 1 July 2013; AND
b) That client has not received personal advice before 1 July 2013.
Both a) and b) apply to determining whether your client is a
“new client” for Opt-In obligations to apply. Also depending on
how you acquired your Pre 1 July 2013 clients, when and who
gave them Personal Advice, Opt- in can still apply.
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Opt-In Scenario table
Nine Common Clients Scenario
Scenario 1
Adviser owned/bought the clients pre 1/7/2013 and provided personal advice to them pre 1/7/2013
(they may have been on an Ongoing Fee Arrangement (OFA)(formal or implied) or they may never have
been on an OFA).
Scenario 2
Adviser changes practice within same licensee and gave clients personal advice pre 1/7/13 (they may
have been on an Ongoing Fee Arrangement (formal or implied) or they may never have been on an OFA)
Personal advice was provided by or on behalf of the licensee pre 1/7/2013 and, as long as the licensee
doesn’t change, Opt-In does not apply.
Scenario 3
Transfer of clients within licensee that have been provided with personal advice pre 1/7/13 (they may
have been on an Ongoing Fee Arrangement (formal or implied) or they may never have been on an OFA).
Opt-In Required
No
No
No
Personal advice was provided by or on behalf of the licensee pre 1/7/2013 and as long as the licensee
doesn’t change Opt-In does not apply.
Scenario 4 (a and b)
a) Current adviser bought the clients pre 1/7/13. The old adviser/licensee provided them with personal
advice pre 1/7/13; however current adviser did not. Clients were on an OFA with old licensee which
current adviser has not changed.*
No
No
b) Current adviser bought the clients POST 1/7/13. The old adviser/licensee provided them with personal
advice pre 1/7/13. Clients were on an OFA with old licensee which current adviser has not changed.*
*Or, if they have put clients on a new OFA, the character of the OFA was not changed to the extent it can
be considered to be a new arrangement
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Scenario 5
The adviser changes licensee after 1/7/13. The adviser gave the clients pre 1/7/13 personal advice under
the old licensee. After the transfer, he/she significantly changes the OFA.
Yes
Scenario 6
Clients a practice acquired and put on an OFA post 1/7/13 other than as a result of a client book
purchase/adviser transfer
Yes
Scenario 7
The adviser bought the clients post 1/7/13. The old adviser/old licensee provided them with personal
advice pre 1/7/13; however current adviser (with a new licensee) did not. The pre-1/7/13 personal advice
was one-off advice; the clients were not put on an OFA. The new adviser puts the clients on an OFA post
1/7/13
Scenario 8
The current adviser bought the clients post 1/7/13. The old adviser/old licensee provided them with
personal advice pre 1/7/13; however current adviser (with a new licensee) did not. The clients were on an
OFA with the old adviser/licensee however the current adviser puts the clients on a new OFA post 1/7/13
(or changes the existing OFA to such an extent that it was essentially a new OFA.)
Scenario 9
Current Adviser bought the clients Post or Pre 1/7/13. The previous adviser/old licensee had also bought
these clients from another adviser pre 1/7/13, BUT HAD NOT provided them with personal advice pre
1/7/13. There was NO pre-1/7/13 personal advice given by either the current adviser/licensee or the
previous adviser/licensee even though they may have been put on an implied or formal OFA and FDS's
issued. The clients are put on a new OFA post 1/7/13
Yes
Yes
Yes
Note: - Where you are seeking to change an existing OFA please discuss this with your licensee to ensure that the character of the OFA is not
changed to the extent it can be considered to be a new arrangement.
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Opt-In Decision Tree
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Due diligence requirements to be aware of with bought books of clients!





Understanding of the number of clients who are subject to Opt-in
Ability of the previous adviser to demonstrate that personal advice has been provided pre
1/07/13 and that these records can be obtained (e.g SoA’s)
Understanding of who the fee recipient is in the OFA/OGSA ie licensee/adviser/practice
The nature of existing ongoing service agreements and the services offered and delivered
including our capacity to identify and desire to continue these existing arrangements. Note:
A significant change to the previous OFA may result in opt-in obligations for these clients
The impact of the above on your commercial arrangements
How we see the process working
We will create an additional page for the “Renewal Notice” that will be added to the FDS template and
will be due every 2nd year. The “Renewal Notice” will request the client to return a written response
either negative or positive (Yes or No) to continue the ongoing fee arrangement. Please refer to the
XPLAN user guide which will explain how to include the Renewal Notice with the FDS.
Renewal Notice content
The Renewal Notice will need to request the client to renew the ongoing fee arrangement.
It will also contain information setting out what will happen if the client elects not to renew the
arrangement, or if they do not respond to the Renewal Notice, in particular, that the arrangement,
including the provision of advice and services as well as the ongoing fee, will terminate. It will also
contain a statement that if no response has been received in writing within the notice period, it will be
taken that the client has decided not to renew the arrangement.
In terms of clients notifying the adviser/practice in writing of their decision to renew or not renew the
arrangement, this can be administered flexibly, using a range of mediums including SMS, letter, email
or facsimile. NOTE: It cannot be a verbal response. You must be able to provide documented
evidence of the client’s response (negative or positive) and this record must be stored on the client
file.
SMS RESPONSES: For SMS responses, practices will need to utilise XPLAN or another system
approved by your licensee that meets the evidentiary requirements. To use this method, you will
need a Telco Provider, the XPLAN module and to bear any additional costs for the SMS messages.
The XPLAN/Telco combination will enable you to receive and appropriately record an electronic
response in XPLAN against the clients’ file. Other approved systems will need to do the same.
Note: Phone screen shots of SMS messages are not sufficient evidence (please see Q&A’s).
POSTED RESPONSES: If notification is sent by post, the notification will be taken to have been
given at the time at which the letter would be delivered in the ordinary course of post in accordance
with s29(1) of the Acts Interpretation Act 1901 (Cth). You must collect and open your mail daily
and ensure that any client who opts out is actioned that day.
EMAIL RESPONSES: Email responses are acceptable, providing there is clear recognition that the
client understands the cost and contents of the ongoing fee/service arrangement they are agreeing to
continue.
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FAX RESPONSES: Fax responses are acceptable. These should be in the form of a signed
Renewal Notice.
VOICE RECORDED RESPONSES: The legislation does not allow voice recordings as evidence for
consent. We are looking into what can be done and if this rule can be changed in the future. See
Q&A’s.
Identifying clients who are subject to Opt-In
To implement the Opt-in requirements into your business, utilise the Scenario table and Decision Tree
on (pages 5,6 and 7) to identify all clients that will be subject to Opt-In obligations.
Once you have identified which clients are subject to an Opt-In “Renewal Notice”, the practice must
establish processes to ensure that the Opt-In “Renewal Notice” is produced and delivered within 30
days of their OGSA “2 year anniversary date”. (We are recommending that you use the FDS date to
reduce the number of dates you need to manage.)
How do you determine the two year anniversary date for the opt-in Renewal
Notice?
The anniversary day (Renewal Notice day) for the Renewal Notice is determined with reference to the
day on which the arrangement was entered into by the client and the licensee/adviser/practice.
Depending on how you manage your engagement, the date the arrangement is entered into may be
the date the client signs an authority to proceed or on-going fee agreement. Again, we recommend
using the FDS date.
Note: where advisers have chosen to bring forward their FDS date, and they consequently do not
align with the date the OGSA was originally entered into, we consider they should use the new FDS
date as the date from which the Opt-in Renewal Notice will be sent to ensure they meet the intent of
the legislation. We suggest you send the Opt-in Renewal Notice with the FDS to avoid having to
manage 2 dates and providing 2 separate documents.
How do you action the responses to the Renewal Notice?
As stated, the Opt-In renewal will be an additional page attached to the FDS. The client has 30 days
from the date the Opt-in notice was sent to respond to the Renewal Notice request. Following the
Timeline Overview on the next page, there are four possible scenarios that could occur. Please refer
to these scenarios for further details.
A practice will need to establish a business process for clients that are subject to confirming their OptIn renewal with a robust follow up process to contact each and every non responsive client prior to the
50th day (from date the Renewal Notice was sent) before the practice must execute a termination of
the OGSA and fees (See example timeline on next page for an example).
The practice will need to decide if the client is to remain a client without an ongoing service
arrangement in place i.e. a Pay as you go/self-directed or transactional client or to not be a client at
all. The outcome should then be communicated and actioned accordingly (i.e to the client and
product provider).
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Timeline overview of the process?
“New
Client” Optin
Renewals
From 1 July
2013
OGSA
Signed
15 July 13
FDS must be
sent within
30 days
of 15/7/14
*15 July 14
If the renewal notice
is not returned with
a “Yes “or “No” by
14 August (30 days from when FDS
was sent) the law allows a further
30 day to obtain consent
before fees must be turned off
FDS mailed by
your Practice
within 30 days
Of 15/7/15
with annexed
Opt-in Renewal
Notice
15 July 15
14 Aug 15
3 Sept 15
20 days
30 days
FEES
TURNED OFF
13 Sept
10 days
Maximum 50 days
OGSA
1st FDS
Example:
Fred & Mary sign-up to your Silver
Ongoing Service offer on or after 1
July 2013, assume its 15th July 2013 for
this example
• Fred & Mary are new client
• Fred & Mary did not receive personal
advice from you before 1 July 2013
*TIP
For Opt-in Renewal Notice Clients we
recommend FDS & Renewal Notice is
issued ASAP from the due date even
though you have 30 days to issue the
FDS with the Opt-in Renewal Notice
2nd FDS & Opt
-In Renewal
Notice
Consent
received
Yes /No
Consent Received Yes or No
If you are advised during the 50
days from when the FDS/Opt-In
was sent that the client is no
longer continuing their ongoing
fee arrangement you must
instigate processes immediately
to turn off fees effective from
the day the client gives you the
Notice, ie the date the Practice
was informed in writing by
either SMS or email or if posted
by the client the day the letter
would be delivered in the
ordinary course of the post.
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Notification
period to fund
manager
No Response from client
If consent is not received (ie
no reply) by the 50th day from
the FDS/Opt-In due date the
practice must accept that the
client no longer wishes to
have an OGSA and the
Practice must contact the
fund manager to instigate the
“turning off fees” to ensure
Fund Manager completion by
the 60th day.
Scenario 1- Assume client immediately returns the Renewal Notice to
confirm they no longer wish to participate in the OGSA
Actions:
 Important: the ongoing service arrangement terminates on the day on which the notification is
given by the client.
 Contact the client to determine if they wish to remain a client and therefore take up a different
service package i.e. lower cost offer or PAYG (i.e. self-directed/transactional, seeking and
paying for advice when they determine they need it) (See FAQs) If they wish to amend their
service offer, update segmentation in XPLAN, update next Opt-In date, contact the fund
manager/insurer to amend the fees and issue either a new OGSA or letter to confirm
transactional client only. Retain all documentation and evidence on the client file.
 If the client does not wish to remain a client, you are required to immediately contact the fund
manager/insurers and suspend the existing ASF or other fees that form part of the OGSA and
issue a cessation of client letter. Retain all documentation and evidence on the client file.
Scenario 2 – Assume the client does not respond within the initial 30 day
period.
Actions:
Following the initial 30 days the client has in accordance with the Renewal Notice to respond, under
the Corporations Act, you have a further 30 days before you are obliged to terminate the OFA.
However, to ensure the deadline for termination is met, the licensee has determined a business rule
that reduces this timeframe to 20 days only, at which time you must notify the fund manager. The
extra 10 days is allowed as a buffer for the fund manager administration teams to action the request.
We strongly recommend that clients are contacted to ensure they have received the FDS and
Renewal Notice and encouraged to make a decision during this additional 20 days, if they have not
responded in the initial 30 day period.
 Important: As the fees must be suspended no later than the 60th day from the date the
Renewal Notice was sent (refer to timeline on previous page), the Fund Manager/product
provider must be notified with sufficient time for their administration teams to implement the
request. For this reason, the licensee has taken the position that the practice must advise the
fund manager/product provider early, allowing 10 days for them to implement the request. This
will mean that although allowed 30 days by law from the date you receive the response, you will
now only be allowed 20 days from the date you receive the response, at which time you must
notify the fund manager/product provider to terminate the OFA. (Note: The 20 day timeframe
will be noted in XPLAN.)
Scenario 3 – Assume the client agrees to the Opt-In renewal (we expect this
will be the case for the majority of clients.)
Actions:
It is absolutely imperative that the client’s written positive consent is maintained and recorded on the
client file. The next Opt-in date should be checked on XPLAN to ensure the system has advanced
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these 2 years and for those not on XPLAN, the next Opt-in date must be noted in a Licensee supplied
spreadsheet that will be provided to all non XPLAN users.
Scenario 4 – No response has been received within the total 50 day period.
The adviser has therefore terminated the OFA and fees as required. The
adviser then receives notification after the deadlines have passed and action
has been taken, that the client wishes to continue the OGSA/OFA
Actions:
Even if you wish to reinstitute the same arrangement, we expect a new OFA to be signed by the client
including any platform or other forms necessary to reinstate the fees.
You should have the client sign a new OFA either for a new service offer or one that replicates the
existing service offer. (Note: this will then change your FDS and Opt-in dates, which will need to be
amended in XPLAN/other.)
Note: Restarting the new service agreement simply means you have lost the opportunity to earn
revenue for the period between the time it was suspended and the date of reinstatement. The client
will still pay the full 12 month fee, albeit with a break in between, where no services were delivered. .
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2.How do I implement – XPLAN?
XPLAN PROCESS
For those using the CRM component of XPLAN, the following screen will appear.
Please refer to the separate XPLAN Opt-In set up instruction guide that shows how to complete the
various fields as you test each client against the Opt-In requirements within the Opt-In Scenario table
and Decision tree on pages 5, 6 and 7.
Important note: Opt-in and fee disclosure compliance relies on a number of factors including data
quality ie in the set-up of the XPLAN fields, documented business processes and a business support
team that ensures that the delivery of the Opt-in Renewal Notice and Fee Disclosure Statements meet
the requirements of the legislation. It is quality processes and attention to detail that will protect the
proprietor from errors and breaches of the legislation.
3.What documentation do I need on file to prove that the
client has agreed to renew/continue the ongoing service
arrangement?





The signed and dated copy of the Opt-In “Renewal Notice”, or
The clients consent by letter (i.e. signed and dated by the client), or
The clients consent by email, or
The clients consent by Fax, or
An automated SMS response generated via XPLAN. Note: you will be required to have the
correct module and invest in the telecommunications costs associated with this function.
Note: We cannot accept a verbal confirmation of a client acceptance that has been taken down as a
file note. With reference to Call recording, please refer to the Q&A’s as this is currently not an
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acceptable method of evidence, as advised under section g: Renewal Notice content, we are looking
into what can be done and if this can be changed in the future..
4.What audit or checking process will be applied and what
are the consequences of non-compliance?
As is the case with FDSs, Advice Delivery Compliance will review FDS and Opt-In obligations within
the files selected for an Adviser’s Advice Assurance review.
Your SDM/RPDM/RRPDM (State/Business/Regional Practice Development Manager), Practice
Coaches and Licensee will sample and test the robustness of the overall FDS delivery and Opt-In
process in your practice from time to time. This includes reviewing the Opt-In due diligence
conducted by the practice where client book acquisitions have been made.
In cases of non-compliance, an incident will be raised and an assessment made of the extent of the
failure to adhere to process (i.e.; is it systemic or a one-off) that will drive consequence management
outcomes which include and are not limited to remediation.
5.Regulatory
The primary Opt-in obligation falls on the licensee as the fee recipient under the ongoing fee
arrangement. However as an Authorised Representative, you have the obligation to deliver the
services you have promised and follow the requirements of the licensee as set out in various Business
Rules, Professional standards manual, compliance documents and guidance.
ASIC has indicated it will take a “facilitative compliance” approach to FDSs and Opt-In until 1 July
2015, allowing licensees time to establish their processes and controls in compliance with the law.
With Opt-in now part of legislation, practice principals and advisers need to be sure that they have
instituted robust repeatable processes to ensure they meet their obligations. Failure to do so can
expose the licensee to financial penalties:


$50,000 for an individual
$250,000 for a body corporate
The risk is heightened when fees are deducted contrary to a client’s wishes – i.e. not acting on the
client’s request to opt out in a timely manner.
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6.Questions & Answers
Q1.
What do I do if can't find evidence of personal advice for my pre 1 July 2013 client/s but the client/s
is/are paying ongoing fees ( an adviser service fee)?
The FSP/M3/RI position is that you need to Opt them in.
Q2.
What constitutes evidence of personal advice being provided by me?
An SoA/RoA or even an old Customer advice record if you have one. If for whatever reason you can't locate
any proofs, even though you recall giving advice, you must treat them as being subject to Opt-in if there is an
ongoing fee arrangement is place.
Q3.
What do I do if I miss one or our admin process fails us in terms of Opt-in process management?
Like all incidents you must report the issue including the nature and extent to your SDM/
RRPDM/RPDM. Work with them to prepare the licensee incident report for the ADG Incidents and
Complaints team, determine how many clients are impacted and your proposed approach to rectification,
what will need to change in your business processes to stop any re-occurrence. The incident team will review
and validate your approach enabling you to move to rectifying the oversight.
Q4.
In my practice, I have no-one on an Ongoing Fee Arrangement who is not receiving an FDS. I am
therefore comfortable that my clients have full visibility of the fees they pay through the FDS
disclosure and are willing to continue to accept and pay for my ongoing services. Can I choose to
circumvent the whole Opt-in identification process and apply Opt-in every 2 years to all my clients ie
pre and post 1 July 2013, to simplify the process?
Yes you can but you need to understand that once you have made this decision your licensee will NOT allow
you to change it irrespective of any unintended consequences possibly resulting in the reduction of your
ongoing revenue - i.e. more clients Opt-out than you had anticipated!
Q5.
We are a jumbo practice and dealing with "in writing" confirmation will add significant cost to our
business? The law says I can accept an SMS but not a file Note from a client calling me. Why can't I
use Call Recording to attach a WAV (voice File) to the clients XPLAN record for clients Opting -in?
The law says it must be in writing. We are looking into what can be done and if this can be changed in the
future
Q6
Annual OGSA resign or upgrade
If I chose to have my clients re-sign their current OGSA or sign up to a new one annually, will this
obviate the need to issue an Opt-in renewal?
Yes as long as an FDS is still given for the 12 months up to the date the new OGSA is signed and at the
same time as the OGSA is signed (as you are engaging/re-engaging your client on an annual basis with full
transparency of the services offered and the ability for the client to opt out of the arrangement at any stage
and fees paid). Note there may be a potential overlap in the reporting period for the FDS due date changes
and you will need to inform the client there is no double charging. The Renewal Notice content obligations
must also be complied with (see page 8).
Important: if you do not issue an FDS you will be in breach of the FDS obligations.
Q7.
Can clients Opt out at any time?
Yes. A request to opt out of an Ongoing Fee Arrangement is simply a desire by the client to no longer be an
ongoing fee paying client. The adviser will need to determine what that means i.e do they want a different
service offer, do they want to be a PAYG client (self-directed) or do they want to cease being a client. If it’s to
cease being a client then you would need to terminate the client and issue the cessation of client relationship
letter asap.
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Q8.
What if people want to remain a client and pay for services when they need them rather than sign up
to an OGSA and pay an ongoing service fee?
You should consider the following options;

Consider if you want this person to remain a client. Do they fit your business model? - terminate if you
do not want this type of client, or

Offer them a different level of ongoing service and therefore a lesser package, ie if they are Gold,
perhaps Silver is more suitable, or

Establish a minimum package for these clients. Ie you may wish to establish a policy in your Practice
that all clients must be on some sort of ongoing service in order to be a client, e.g Essentials Package
at $50 per month, or a minimum fee per annum paid monthly, or

Create a Pay as You Go ongoing service offer (PAYG). This would mean these clients are categorised
as either PAYG or self-directed client in your service categories and receive a service flyer that
confirms your decision to pay for advice or review at the time you nominate. The client would then
contact you when they require support and the services would be priced and agreed through a letter of
engagement.
Q9.
I moved clients to whom I have provided personal advice before 1 July 2013, from a Bronze to a Silver
package and I want to increase the % ASF from say 50 bps to 75bps are they subject to Opt-In.
As long as you provided personal advice to these clients before 1 July 2013, (they were not bought as part of
a client purchase) they are grandfathered and are NOT subject to Opt–in.
Note : Advisers have a duty of care when changing service offers and or fees to ensure value is still
delivered and do not leave themselves or their licensee open to a “fairness” argument.
Q10.
What do I do if my client is on holidays overseas and I can’t contact them and therefore can’t respond
within the 50 day period? Am I forced to turn the fees off until they return and then re-sign a new
OGSA once the client returns?
Yes you do have to turn the fees off until such time as you can obtain written consent in the form of a resigned OGSA.
Q11.
What happens to the broken fee period? For example my client confirms they had every intention to
renew with me and I had no choice but to cancel the OFA.
You will need to restart a new ongoing service agreement to reflect the services you agree. This simply
means you have lost the opportunity to earn revenue for the period it was suspended up to the date of
reinstatement.
Q12.
What if I chance it and wait for them to return from holidays before I turn the fees off?
This would be contrary to the licensee’s business rules and potentially a breach of the legislation.
Q13.
What about the Code of Practice exemptions?
From 1 July 2015 advisers who comply with certain ASIC-approved codes of professional practice may be
exempt from the opt-in provisions if they are bound by an approved Code of conduct. No codes have been
approved by ASIC to date. To rely on such a Code may mean an adviser/practice will be subject to an
additional audit regime under that Code. There is also discussion in the industry about a new professional
body that may have its own requirements. As such, we have made a decision not to rely on this exemption
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until more information about the requirements and potential impact on a practice is understood.
Q14.
Can a client Opt-in ahead of the due date?
For example:
The adviser may be aware that the client will be away (overseas etc) at the time the FDS/Opt-in
Renewal Notice is due. Can they therefore send the Opt-in Renewal Notice early and separately from
the FDS.
Yes you can bring the Opt-in Renewal Notice forward (this would reset opt in permanently). However, we
recommend that you also reset the FDS due date to the new Opt-in date, thereby avoiding having to manage
2 dates in the future, and ensuring the client receives the Renewal Notice and FDS at the same time.
Q15.
My client has said no (opted out) and I had an OGSA that saw me charging them 1% which was made
up of 60bps trail and 40bps ASF and their OGSA shows that I charge 1%. Are they now opting out of
the 40bps or the whole 1%?
They are now opting out of the full 1%. Ie they no longer wish to pay an ongoing service fee or receive an
ongoing service relationship.
Note: Fees paid by product issuers are generally not considered to be “fees” under an OFA unless they are
paid under the terms of the OFA itself and therefore paid at the clients direction.
Q16.
If a client changes products/ platforms how does that impact Opt-in?
The obligation to give a Renewal Notice rests with the adviser/licensee who has an OFA with the client.
Unless the OFA changes significantly, any changes to a product or platform would not affect the obligation to
give a Renewal Notice.
Q17
What if I am receiving an ASF from a client I have given personal advice to pre 1/7/13 under the same
licensee and do not have an OGSA with them?
An OGSA may be implied and this client could be grandfathered. We would expect you to re-engage with
this client and request the client sign an OGSA for the services they are receiving.
We have also assumed you have been issuing FDSs in accordance with your licensee’s direction for
this/these clients
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