The Australian Securities and Investments Commission has released guidance for Australian financial services licensees and their representatives on how to comply with the fee disclosure statement requirements under the “Future of Financial Advice” reforms.

Regulatory Guide 245 Fee Disclosure Statements outlines the requirements that will apply to financial services licensees and their representatives who receive ongoing fees from retail clients they have given personal advice to.

Under the FOFA reforms (which are enforced from 1 July this year), advice providers receiving fees for giving personal advice under an ongoing arrangement with a retail client must provide the client with an annual fee disclosure statement, setting out information about:

• the fees paid by the client
• the services provided to the client, and
• the services that the client was entitled to receive.

This obligation is designed to help clients determine whether the fees they are paying are proportionate to the services they have received, or they were entitled to receive.

ASIC Commissioner Peter Kell said the regulatory guide addresses industry queries and assists with industry preparations to comply with the new obligations.

“This guidance provides an indication of what ASIC’s approach will be in administering these important provisions, which are designed to provide clients with an opportunity to assess whether they are getting value for money for the advice they receive.”