ASIC grants FPA members opt-in relief

ASIC said in a statement that advisers who subscribe to the FPA code get relief if they meet certain requirements when entering into ongoing fee arrangements, delivering services under an ongoing fee arrangement and renewing the arrangement.

It said advisers must still renew ongoing fee arrangements, but are given flexibility to agree to a renewal interval with the client, provided the interval is not more than three years.

“The Corporations Act allows ASIC to exempt a person from the opt-in requirement provided it is satisfied that those persons are bound by an ASIC-approved code of conduct that removes the need for persons bound by the code to be bound by the opt-in requirement,” the statement said.

ASIC said it approved the FPA code on the basis that it will achieve the same policy outcomes that the opt-in requirement is intended to achieve: to protect disengaged clients from paying ongoing financial advice fees when they are receiving little or no service.

It added that a crucial part of the code is that the FPA meets and maintains certain minimum code governance requirements, and that the FPA has implemented processes to ensure that subscribers comply with the code.

“Sanctions will apply for non-compliance, including termination of subscription to the code and the FPA member no longer having relief from the opt-in requirement,” the statement said.

“ASIC has the power to revoke its approval of a code where it is satisfied that the code no longer meets the requirements.”