FPA new code to allow opt-in flexibility

Yesterday, ASIC announced it has approved the FPA’s Professional Ongoing Fees Code, effectively giving members flexibility to agree to a renewal interval with their clients.

The code will be available from 1 July 2017 and to FPA practitioner members, including CFP professionals and Financial Planner AFP categories.

Under the new code, FPA members will have the opportunity to implement an ongoing fee arrangement that is more practical and appropriate for their clients and their business, whilst maintaining the highest level of consumer protection, the FPA said.

“The FPA supports professional services engagements that are fair for consumers and fair for members. The approval of this code will provide members with the opportunity to choose the best solution that suits their clients,” Mr De Gori said.

“The Professional Ongoing Fees Code will enable FPA member businesses to apply the ‘fair engagement’ principle to ongoing fee arrangements with their clients. The code supports ongoing fee arrangements which are simple, transparent and fair – that’s good for consumers and good for business.”

Yesterday, 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.”