‘Lack of logic’ in new consent reforms ‘extremely frustrating’

The reforms, which came into effect on 1 July and include the ability for consumers to give digital as well as written consent to deduct ongoing fees, were discussed at length during Worksorted's Annual Advice Agreement Summit on Thursday.

Discussing the effect on advisers Kinetic Compliance director Nadia Docker called the reforms “very complex and nuanced and layered”.

“I think that [advisers are] just frustrated,” Ms Docker said.

“They had hoped – and I guess the intention back when Commissioner Hayne had this recommendation to make the fees be disclosed – that it would be simplified.

“I would say that this is one of the more complex pieces of advice we’ve had to coach the clients through.”

ASIC released the legislative instruments for the reforms in March.

For existing customers, new fee arrangements begin on the anniversary day of the previous ongoing fee arrangement. For new customers, fee arrangements begin on “a day that is no more than 30 days after the fee recipient gives the account holder all the information require[d] to be included in a written consent”, according to the legislative instrument.

Adding to that, Oreana’s head of advice Belinda Barclay said the changes do “not make a difference to the end client”.

“The lack of logic in this whole thing has been extremely frustrating,” she said.

“I don’t want to throw product providers under the bus, but that’s just been a really challenging area to work with, to understand everyone’s process because everyone’s got an entirely different idea.”

The reforms have also proved to be challenging from a tech perspective both for advisers and developers.

Head of sales at management solution Worksorted, Jarrad Gray, said his team worked to not just understand the reforms, but “break them down”.

“It was even harder than just understanding requirements because we also had to build a system process and ecosystem that could handle people doing it wrong,” he said.

“The system needed to cater for people to back out of doing the wrong thing, producing the wrong document.”

Neil Griffiths

Neil is the Deputy Editor of the wealth titles, including ifa and InvestorDaily.

Neil is also the host of the ifa show podcast.