1. Who must comply with the OFA obligations?

Fee recipients must comply with the OFA obligations.

A fee recipient is:

• an Australian financial services (AFS) licensee or its representative who enters into an ongoing fee arrangement with a client, or
• if the licensee or representative has transferred (‘assigned’) their rights under the arrangement, the person who currently holds those rights (i.e. the ‘assignee’ – see section 962C).

Note: All section references in this information sheet are to the Corporations Act 2001 (Corporations Act).

A fee recipient may outsource some of its administrative or compliance functions to a third-party agent. For example, an agent may provide an FDS on behalf of the fee recipient. However, the fee recipient will remain responsible for meeting its obligations.

2. When does an ongoing fee arrangement exist?

An ongoing fee arrangement exists when:

• the fee recipient gives personal advice to a retail client (‘client’)
• the fee recipient and client enter into an arrangement, and
• under the terms of the arrangement, the client must pay the fee recipient a fee (however described or structured) during a period of more than 12 months: see section 962A.

The following examples are not ongoing fee arrangements:

• a payment plan meeting the requirements in section 962A(3), and
• an arrangement under which the only fee payable is:
  • an insurance premium (see section 962A(4)), or
  • a product fee (see section 962A(5)).

We recognise that licensees and advisers frequently enter into fixed-term agreements for charging a client fees for a period of 12 months or less. There are a range of factors that ASIC will consider in determining whether or not such an agreement is an ongoing fee arrangement. In addition to the terms of the written agreement, these factors include but are not limited to:

• whether the agreement is limited to a fixed-term period of 12 months or less
• whether fees stop being charged at the end of the fixed-term period and do not exceed 12 months – for example, because the adviser or licensee has back-office or administrative systems in place to turn off the fees by the end of the fixed-term period, and
• whether there is an understanding between the client and the adviser or licensee that the client will be charged for a period of 12 months or less. This can be demonstrated by information given to the client, including brochures and marketing material, and a general record of discussions with the client.

3. What is an ongoing fee?

An ‘ongoing fee’ is any fee (however described or structured) that is paid under the terms of an ongoing fee arrangement between the fee recipient and the client: see section 962B.

If a third party pays the fee recipient a fee (e.g. commissions), this will generally not be an ongoing fee, where it is paid under a commercial arrangement between a product issuer or platform operator and a fee recipient. However, commissions may also be considered ongoing fees if they are paid with the clear consent, or at the direction, of the client.

We would not generally consider that a commission arrangement is entered into with the clear consent of, or at the direction of, the client merely because it has been disclosed in a Statement of Advice.

4. What are the OFA obligations?

A fee recipient who enters into an ongoing fee arrangement with a client must, each year, comply with the obligations in Division 3 of Part 7.7A of the Corporations Act. These obligations include:

• seeking the client’s renewal of the ongoing fee arrangement annually (see Question 8)
• giving the client an FDS (see Questions 14 and 15), and
• obtaining the client’s written consent before they can deduct, arrange to deduct, or accept deductions of, ongoing fees from the client’s account (see Question 24).

In this information sheet, these requirements are referred to as the ‘OFA obligations’.

The OFA obligations apply only if an ongoing fee arrangement exists between the fee recipient and the client: see section 962.

5. What are the consequences of not complying with the OFA obligations?

If a fee recipient fails to comply with the OFA obligations, the ongoing fee arrangement will terminate: see sections 962F and 962FA.

The fee recipient must not continue to charge ongoing fees after termination of the ongoing fee arrangement. Civil penalties apply to a breach of this requirement: see sections 962P, 1317E and 1317G.

Failure to comply with the obligation to provide an FDS or the obligation not to deduct, or arrange to deduct, ongoing fees without the client’s written consent is also subject to civil penalties: see sections 962G, 962R, 962S, 1317E and 1317G.

6. When do the new OFA obligations commence?

The obligations on fee recipients to renew an ongoing fee arrangement annually, to provide an FDS covering information for the upcoming year, and to obtain a client’s written consent to deduct ongoing fees were introduced by the Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021. These obligations commence from 1 July 2021 for new ongoing fee arrangements that are entered into on or after this date.

For information about the transitional provisions that apply to ongoing fee arrangements in place before 1 July 2021, see Questions 20–23 and Question 35.

7. What is the ‘anniversary day’ for an ongoing fee arrangement?

The ‘anniversary day’ is defined in the law. It is the anniversary of the day on which the ongoing fee arrangement was entered into: see section 962G(3).

For example, if the client signs an Authority to Proceed to enter into an ongoing fee arrangement on 15 August 2021, then the anniversary day for that arrangement will be 15 August for all future years. This will be the case even if the client begins paying fees and receiving services on, for example, 20 August 2021.

If a fee recipient has entered into two or more separate ongoing fee arrangements with a client, there will be multiple anniversary days, and the obligation to provide an FDS will apply to each anniversary day separately.

If a fee recipient wants to change the anniversary day for an ongoing fee arrangement, the fee recipient must enter into a new arrangement with the client.

For information about how the transitional provisions affect the ‘anniversary day’ for ongoing fee arrangements entered into before 1 July 2021, see Question 20.

8. How and when can a client renew an ongoing fee arrangement?

A client may only renew the ongoing fee arrangement in writing and during the ‘renewal period’.

The renewal period is defined in the law: see section 962L. It is a period of 120 days beginning on the anniversary day: see Question 7.

For example, if the anniversary day is 1 July 2023, the client will need to respond in writing by 28 October 2023 to renew the arrangement.

Your clients may renew an ongoing fee arrangement electronically, so long as it is done in writing. For example, the client may:

• reply to you via email or SMS confirming that they wish to renew their ongoing fee arrangement, or
• click a check box on a webpage in response to a statement such as: ‘By ticking the box, you elect to renew the ongoing fee arrangement’.

9. What happens if the client does not renew the ongoing fee arrangement?

If the client does not renew the ongoing fee arrangement during the renewal period, the ongoing fee arrangement will terminate 30 days after the end of the renewal period: see section 962N.

For example, if the anniversary day is 1 July 2023, the client will need to respond in writing by 28 October 2023 to renew the arrangement. If they do not respond by this date, the ongoing fee arrangement will terminate on 27 November 2023 (i.e. 30 days after the end of the renewal period on 28 October 2023).

10. When does an ongoing fee arrangement end?

A client can end an ongoing fee arrangement at any time, in writing: see section 962E.

An ongoing fee arrangement can also come to an end if:

• a client does not renew the ongoing fee arrangement before the renewal period ends (see Question 9), or
• the fee recipient fails to comply with their OFA obligations: see sections 962F and 962FA (see Question 5).

If the ongoing fee arrangement terminates, no further fees can be charged under the arrangement and there is no obligation to continue to provide services to the client.

11. How can an existing client enter into a new ongoing fee arrangement?

A new ongoing fee arrangement will generally be in place when both of the following conditions are met:

• The old arrangement is terminated and a new arrangement commences (these may occur on the same day).
• The client signs a new document (e.g. a letter of engagement or Authority to Proceed) to enter into the new arrangement and that document sets out the terms of the new arrangement.

After the old arrangement is terminated, you must stop charging ongoing fees under that arrangement. This includes notifying relevant third-party account providers that fees can no longer be deducted under the old arrangement. You are also not required to keep providing services under the old arrangement.

The date that the new ongoing fee arrangement commences will generally be the date the client signs the new document expressing their agreement to the terms of the arrangement. That date can be the same as the date the old arrangement terminated.

You must also obtain a new written consent to deduct fees under the new ongoing fee arrangement: see Question 24. This also involves notifying any third-party account providers of the termination of the previous written consent for the existing ongoing fee arrangement.

12. What records need to be kept?

The Financial Sector Reform (Hayne Royal Commission Response—Advice Fees) Regulations 2021 set out the compliance records that must be kept by fee recipients. These records can be kept electronically.

A fee recipient must keep the following records in relation to an FDS for at least five years:

• each FDS that you have given to your clients, including the date when the FDS was given and how it was given (e.g. via email or text)
• any notification from a client to renew, not renew or terminate an ongoing fee arrangement, and the date on which the notification was given, and
• if an ongoing fee arrangement has been terminated, the date on which it terminated and the basis on which it terminated: see regulation 7.7A.11AA.

You must keep the following records in relation to a written consent for at least five years:

• each written consent given to you by a client, including the date when the consent was given (e.g. if the client provides their written consent by signing a box on a webpage, you can keep a time-stamped screenshot of that page to evidence the client’s written consent)
• each notice to vary or withdraw a written consent given to you by a client, including:
  • the date you were given the notice, and
  • the date you confirmed you had received the notice
• communications from you (e.g. emails, SMS and letters) about giving the third-party account provider:
  • a copy of the written consent
  • a copy of a notice to withdraw or vary the consent, and
  • written notice of when the consent ceases, and
• details of any arrangement between you and an account provider: see regulation 7.7A.11AA.

Records of electronic documents must also be kept. For example, you can keep an image of the SMS, the sender’s name and date of receipt.

If you are a representative of an AFS licensee, the licensee should also keep or have access to the records, to allow them to monitor compliance with their OFA obligations: see section 912A(1)(ca).

Failure to comply with the record-keeping obligations for ongoing fee arrangements is a criminal offence: see section 962X(1).

13. Can ASIC provide relief from the OFA obligations?

No. ASIC does not have any exemption or modification powers in relation to Division 3 of Part 7.7A of the Corporations Act. As a result, we cannot provide relief from the OFA obligations.

14. When do I need to give an FDS?

As a fee recipient, you must give your clients an FDS no later than 60 days after the anniversary day of the ongoing fee arrangement each year: see section 962G(1).

For example, if the anniversary day is 1 July 2022, you can give the FDS to your client any time between 1 July 2022 and 30 August 2022 (i.e. 60 days after the anniversary day of 1 July 2022). These dates will remain fixed each year.

Note: The ‘anniversary day’ is the anniversary of the day that the client enters into an ongoing fee arrangement: see section 962G(3) and Question 7. This means that you do not need to give your client an FDS when they first enter into an ongoing fee arrangement, but for all subsequent years after that.

15. What information do I need to include in an FDS?

An FDS must include the following information about your client’s ongoing fee arrangement:

• the amount of each ongoing fee (in Australian dollars) paid by your client under the arrangement in the previous year
• the amount of each ongoing fee your client will be required to pay under the arrangement during the upcoming year (see also Question 16)
• the services that your client received, and was entitled to receive, under the arrangement during the previous year (including from any previous fee recipient under the client’s arrangement)
• the services your client will be entitled to receive under the arrangement during the upcoming year
• the ongoing fees your client will pay after the end of the upcoming year, but for services they are entitled to receive during the upcoming year, and
• how to renew the arrangement: see section 962H.

For an FDS that is provided during the transition period, the FDS can include a reasonable estimate of the amount of fees and information about services for the last 60 days of the 12-month period ending immediately before the transition day: see Question 22 for more details.

16. What ongoing fees do I need to disclose in an FDS for the upcoming year?

The FDS must state the amount of each ongoing fee your client will be required to pay during the upcoming year: see section 962H(2A)(a). The amount of ongoing fees must be in Australian dollars.

The FDS must also state the amount of each ongoing fee your client will pay after the end of the upcoming year but for services they are entitled to receive during the upcoming year. This is a requirement in the law: see section 962H(2A)(c). For example, the anniversary day for an ongoing fee arrangement is 1 July. The client is entitled to receive a service between 1 July 2022 and 30 June 2023 (i.e. the upcoming year) and will need to pay an ongoing fee on 5 July 2023 for that service. The FDS for the period covering 1 July 2022 to 30 June 2023 will need to state that ongoing fee.

The FDS does not need to state an ongoing fee if the fee is for:

• the administration, management or operation of a financial product (e.g. a monthly account-keeping fee for a basic deposit product or an administration or investment fee charged by a superannuation trustee or a responsible entity of registered scheme); or
• intra-fund advice: see regulations 7.7A.11(1) and 7.7A.10A(3).

A reasonable estimate

If the amount of an ongoing fee cannot be determined at the time of preparing the FDS (e.g. asset-based fees), the FDS must include:

• a reasonable estimate of the amount, and
• an explanation of the method used to work out the estimate: see section 962H(2B).

A reasonable estimate should be based on all of the relevant information available to the fee recipient at the time the estimate is made. It should also reflect the fee recipient’s most accurate account of the client’s position at that time.

For example, when the fee being charged is an asset-based fee, the information could include:

• employer contributions that are expected to be made throughout the year to a client’s superannuation fund
• additional investments that may be made by a client based on the advice provided, and
• any known large withdrawals to be made during the following 12 months.

17. How should information be presented? Can I include extra information?

The FDS should be consumer-friendly, concise and easy to read.

The law does not prescribe the level of detail required in an FDS. However, in relation to services provided to the client, you must clearly distinguish between the services the client was entitled to receive and the services the client actually received in the previous year.

You may include information in the FDS which is additional to the information required by section 962H: see Question 15. However, any additional information should be kept separate from the required information.

18. Can I give an FDS electronically?

Yes. You can give an FDS to your clients electronically (provided it is in writing). For example, an FDS can be provided by email, on a webpage or through an app. For the avoidance of doubt, an FDS cannot take the form of a video. This is because the law requires the FDS to be a statement in writing: see section 962H(1).

19. Can I give the FDS to the client with the written consent? How do I deal with duplicate information?

You can combine the FDS and written consent into a single document.

Generally, a written consent must contain the information required by ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124: see Question 31.

However, to minimise duplication, you will not need to include that information in the written consent if:

• the written consent and the FDS are combined
• the required information is already covered in the FDS (e.g. if you have already stated the amount of fees in the FDS, you don’t have to state it again in the written consent), and
• the FDS is worded and presented in a clear, concise and effective manner. 

Where an FDS and written consent are combined, you will still need to provide the written consent to the relevant third-party account provider(s).

Where the client holds accounts with multiple third-party account providers, you should consider your privacy obligations when passing on confidential information in the written consent to different account providers, and seek independent legal advice if necessary.

20. When do I need to give an FDS for an existing ongoing fee arrangement during the transition period?

For all ongoing fee arrangements that are in force immediately before 1 July 2021, the Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021 introduced transitional arrangements for fee recipients in relation to providing FDSs.

As a fee recipient, you must give the client an FDS between 1 July 2021 and 30 June 2022 (i.e. the transition period) for an existing ongoing fee arrangement: see section 1673C. The FDS that you provide must include the information outlined at Question 15.

The day that you provide the client with an FDS during the transition period will become the anniversary day for that arrangement in each subsequent year: see section 1673C(6).

For example, if you provide an FDS on 2 July 2021:

• the anniversary day for the ongoing fee arrangement will become 2 July for all future years, and
• each FDS in the future will need to cover information for the period between 2 July and 1 July (i.e. the previous year) and from 2 July to 1 July (i.e. the upcoming year): see 1673C(4)(b)).

21. What is the transition day for an ongoing fee arrangement?

The ‘transition day’ for an ongoing fee arrangement is defined in the law: see section 1673. It is the earlier of:

• the day that you give an FDS to the client, or
• the last day of the transition period (i.e. 30 June 2022).

The ‘transition day’ is relevant to determining the period of information that must be covered in an FDS given during the transition period: see Questions 22 and 23.

22. What information do I need to include in an FDS during the transition period?

An FDS that you provide during the transition period must comply with the usual information requirements for an FDS (see Question 15), including requirements about the amount of ongoing fees and the services to be provided under the ongoing fee arrangement: see section 1673C.

An FDS provided during the transition period must cover information for:

• the previous year – a 12-month period that ends just before the transition day for the ongoing fee arrangement (see Question 21), and
• the upcoming year – a 12-month period that begins on the transition day for the arrangement: see section 1673C(4).

For example, if you give the client an FDS on 1 July 2021, the information in the FDS must cover the periods:

• 1 July 2020 to 30 June 2021 for the previous year, and
• 1 July 2021 to 30 June 2022 for the upcoming year.

However, in relation to:

• information about services – you can provide a reasonable estimate of services received during the period of 60 days ending immediately before the transition day (e.g. you can describe in general terms the services that the client is scheduled to receive but may or may not receive in the last 60 days), and

• information about ongoing fees – you can provide a reasonable estimate of any amount of ongoing fees that relates to the period of 60 days ending immediately before the transition day: see regulation 7.7A.11(2).

For information about ongoing fees, if you know the actual amount of any ongoing fees paid by the client during this 60-day period, you can disclose this in the FDS if you wish. For example, if you know the actual ongoing fees paid by the client for 11 of the 12 months immediately before the transition day, you can disclose the actual ongoing fees in the FDS and provide a reasonable estimate of ongoing fees for the last month.

A reasonable estimate should be based on all of the relevant information available to the fee recipient at the time the estimate is made. It should also reflect the fee recipient’s most accurate account of the client’s position at that time: see Question 16 for more details.

There is no flexibility in the law in relation to these transitional arrangements. ASIC does not have any powers to modify the period of information that must be covered in a transition FDS or make exemptions in relation to the transitional arrangements: see Question 13.

23. What happens to an existing obligation to provide an FDS before 1 July 2021 during the transition period?

Under former sections 962G and 962K of the Corporations Act, you had:

• a period of 60 days after the ‘disclosure day’ (i.e. the day when the obligation to provide an FDS is triggered) to provide an FDS to your client, and
• a period of 60 days after the renewal notice day to provide a renewal notice and an FDS to your client.

There will be circumstances where your obligation to provide an FDS and/or renewal notice is triggered, but not discharged, before the new ongoing fee arrangement reforms commence on 1 July 2021. This is because the 60-day period you have to give the client an FDS and/or renewal notice under the previous law ends on or after 1 July 2021.

For example, if you have a disclosure day of 1 June 2021, the 60-day period will end on 31 July 2021 (i.e. after the reforms commence).

In these circumstances, you will only need to give your client one FDS during the transition period: see sections 1673D and 1673E.

In these circumstances, the FDS must:

• for previous years – include information about the fees charged and services received by the client covering the period between the day the client received their last FDS and the transition day (see section 1673D), and
• for the upcoming year – include information about fees to be charged and services the client is entitled to receive for the next 12 months after the transition day.

For example, if your obligation to give an FDS was triggered on 18 June 2021 (i.e. the ‘disclosure day’ under the previous law) but this obligation was not discharged before 1 July 2021 and you later provide the client an FDS on 13 September 2021 under the transitional arrangements, that FDS must include:

• for previous years – information about services already provided and fees already paid by the client in previous years:
  • the period of 12 months immediately before 13 September 2021 (i.e. 13 September 2020 to 12 September 2021), and
  • a further period of 86 days (i.e. 18 June 2020 to 12 September 2020). This is because the last FDS was given to the client on 18 June 2020 and covered the period from 18 June 2019 to 17 June 2020, and
• for the upcoming year – information about services the client is entitled to receive and fees to be paid by the client in the upcoming year for the period of 12 months starting on 13 September 2021 (i.e. 13 September 2021 to 12 September 2022). The anniversary day is 13 September for future years.

There is no flexibility in the law in relation to these transitional arrangements. ASIC does not have any powers to modify the period of information that must be covered in a transition FDS or make exemptions in relation to the transitional arrangements: see Question 13.

24. When do I need to obtain written consent?

As a fee recipient, you must obtain the written consent of the account holder (i.e. your client) before you can deduct, arrange to deduct, or accept the payment of, fees under an ongoing fee arrangement: see sections 962R and 962S.

The written consent must meet the requirements in ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124: see Question 31.

25. What types of account do I need to obtain written consent for?

The requirement to obtain written consent applies when:

• your client holds an account with you from which you intend to deduct ongoing fees under an ongoing fee arrangement (see section 962R), or
• your client holds an account with a third-party account provider (e.g. a superannuation trustee or responsible entity of a managed investment scheme) from which you intend to arrange to deduct ongoing fees under an ongoing fee arrangement (see section 962S).

This written consent requirement does not apply if your client’s account from which you intend to deduct, or arrange to deduct, ongoing fees is an account linked to a credit card or is a basic deposit product: see sections 962R(1)(c) and 962S(1)(c).

26. When can I arrange to deduct ongoing fees from a client’s account?

When a third-party account provider (e.g. a superannuation trustee or responsible entity) holds your client’s account, you must not arrange to deduct fees from that account unless:

• you have obtained the client’s written consent to arrange for the third-party account provider to deduct ongoing fees from their account
• the written consent meets the requirements in ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124, and
• you have given a copy of the client’s written consent to the third-party account provider.

Ongoing fees cannot be deducted from a MySuper account.

Deducting, arranging to deduct, or accepting payment of, fees from your client’s account without obtaining written consent is subject to a civil penalty: see section 962R(4) and section 962S(5) and (8).

27. Can someone else deduct fees from a client’s account on my behalf?

Yes. If a third party is arranging a deduction of fees on behalf of the fee recipient as its agent, and the client has given consent to the fee recipient to arrange such a deduction, the third party can rely on the consent given to the fee recipient: see section 962S(2).

For example, if you are a representative of an AFS licensee and your client has given you their written consent, the AFS licensee can act as your agent and rely on the written consent given to you. Or, if you are an AFS licensee, your representative may act as an agent and rely on the consent given to you.

28. When must I stop deducting ongoing fees from a client’s account?

You must stop deducting, arranging to deduct, or accepting the payment of, ongoing fees from your client’s account if the client’s written consent has:

• been withdrawn
• been varied in any way that does not allow for the deduction to be made from the account, or
• ceased to have effect because:
  • the consent has expired or been withdrawn, or
  • the ongoing fee arrangement has terminated (see Question 10): see sections 962U and 962V.

29. What happens when a client’s written consent is withdrawn or varied?

Your client may withdraw or vary their consent at any time by giving you written notice (e.g. by email, text or any other written form): see section 962U.

You must within 10 business days of receiving this written notice:

• give written confirmation to the client that you received the notice, and
• if a copy of the consent was provided to a third-party account provider, give the account provider a copy of the notice.

If your client gives notice to the third-party account provider asking them to stop ongoing fees being deducted from their account, the third-party account provider should immediately stop deducting ongoing fees when they receive this notice. If the third-party account provider is a superannuation trustee, they will need to stop deducting ongoing fees from their member’s account as part of their existing obligations.

You should have appropriate communication methods with the account provider(s) to ensure you are made aware in a timely manner when a client gives notice to an account provider.

Where the client holds accounts with multiple third-party account providers, you should consider your privacy obligations when passing on confidential information in the written consent to different account providers, and seek independent legal advice if necessary: see Question 19.

30. When does the written consent cease to have effect?

Your client’s written consent will cease to have effect 150 days after the anniversary day, unless your client:

• terminates the ongoing fee arrangement at an earlier date, or
• gives a new written consent in relation to the arrangement.

At the end of the 150-day period, you must:

• notify the account provider within 10 business days that the consent has ceased, and
• not continue to deduct, arrange to deduct, or accept the payment of, any further ongoing fees unless you have obtained a new written consent from the client: see section 962V.

If you accept payment of ongoing fees from an account provider after the client has withdrawn their consent, you have 10 business days from the date of payment to repay the amount into the client’s account: see section 962S(9). If you do not repay the amount, the client will have rights to seek a refund of that amount in court: see section 1317GB.

31. What information must be included in the written consent?

The written consent you ask your client to complete must contain, at a minimum, the following information in ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124:

• the name of the account holder(s) (i.e. your client(s)), and the name and contact details of the person who is to be the fee recipient, at the time the client signs, or otherwise agrees in writing (e.g. electronically) to the terms of, the written consent
• an explanation of why you are seeking the client’s consent
• information about either:
• the amount of ongoing fees that the client will pay during the upcoming year, or
• if you cannot determine the exact amount, a reasonable estimate of the ongoing fee and the method you used to calculate the estimate
• information about the frequency of ongoing fee deductions that the client will pay during the upcoming year
• details about what accounts the ongoing fees will be deducted from and how much will be deducted out of each account
• a statement about how long the consent will last
• a statement to the effect that the client can vary or withdraw their written consent at any time, and
• a date indicating when the consent was given by the client.

The written consent must be worded and presented in a clear, concise and effective manner.

Completing a product application form is not enough to satisfy the written consent requirement, unless the form meets the requirements in the ASIC instrument.

For an example of a written consent, see Attachment to INFO 256: Example written consent form (ongoing fees) (PDF 179 KB). You can also refer to the Explanatory Statement to the ASIC instrument for applied examples and a detailed explanation of the information required in a written consent.

For further information about when the identity of the account holder or fee recipient changes, see Questions 36 and 37.

32. Can I seek written consent electronically?

Yes. You can seek written consent electronically (e.g. via email or on a webpage).

Your client can also sign the written consent electronically by, for example:

• clicking a check box on a webpage in response to a statement such as: ‘By ticking the box, you consent to the charging of the ongoing fees that are set out in this document’, or
• sending you their written consent via email with their electronic signature attached.

However, a client cannot give consent verbally (e.g. a voice recording or verbal confirmation). This is because the law requires written consent.

33. Does the written consent need to state the date when consent is given?

Yes. The written consent must include the date on which consent was given by your client. This could be done by including a date field in the written consent for the client to complete or time-stamping the written consent.

34. What happens if there is more than one account holder?

Where there is more than one account holder (e.g. a couple), all joint holders of the account must give the written consent every year.

35. When do I need to obtain a client’s written consent for ongoing fee arrangements that existed before 1 July 2021?

For ongoing fee arrangements in force immediately before 1 July 2021, you must obtain written consent from your client before deducting, arranging to deduct, or accepting the deduction of, ongoing fees under the arrangement, starting from 1 July 2022: see sections 1673B and 1673F.

For example, if you had an ongoing fee arrangement in place with a client on 1 June 2021, you will need to obtain the client’s written consent for that arrangement from 1 July 2022 onwards.

However, a client can still provide their written consent to a fee recipient for the deduction of ongoing fees from their account before 1 July 2022. If a client chooses to do this, they can withdraw and vary their consent at any time: see section 1673F(2).

36. What if my client changes their name after the consent has been signed?

If your client changes their name (e.g. following marriage) after the consent has been signed, this does not cause their written consent to the ongoing fee arrangement to become invalid, provided the consent and arrangement remains the same in all other respects.

Likewise, if you have arranged for ongoing fees to be deducted from a client account with a third-party account provider and the client’s name changes, you do not need to obtain a new written consent from that client to arrange for the fees to be deducted, provided the consent and arrangement remains the same in all other respects.

Note: The guidance in Question 36 takes effect from 29 June 2023 (i.e. the date that ASIC Corporations and Superannuation (Amendment) Instrument 2023/512 commenced).

37. Do I need to obtain new written consent from the client where there has been a transfer of rights under an ongoing fee arrangement?

If you transfer the rights under an ongoing fee arrangement to a new fee recipient (e.g. following the sale or transfer of the advice business), this does not cause a client’s written consent in relation to that arrangement to become invalid, provided the consent and arrangement remains the same in all other respects.

This means that a transfer of rights does not automatically require a new written consent to be obtained. However, ASIC considers that, as part of a transfer of rights under an ongoing fee arrangement, clients should be notified of the change in fee recipient by both the existing and new fee recipient. The relevant communications should be clear, concise and effective, and remind clients that they can cease their ongoing fee arrangement at any time.

Likewise, if you have received a transfer of rights under an ongoing fee arrangement and the ongoing fees are deducted from an account with a third-party account provider, you do not need to obtain a new written consent from the client to arrange for the ongoing fees to be deducted. Instead, you will be able to accept deductions under the existing arrangement even though the fee recipient details will have changed, provided the consent and arrangement remains the same in all other respects and you have ensured that the third-party account provider has a copy of the original consent.

Note: The guidance in Question 37 takes effect from 29 June 2023 (i.e. the date that ASIC Corporations and Superannuation (Amendment) Instrument 2023/512 commenced).