The association of economic Advisers (AFA) says it has reached out to the corporate regulator and Treasury to share its issues over the intervening time arrangements for new fee disclosure statement (FDS) compliance.
Based on the AFA, it is “simply no longer feasible” for advisers to prepare an FDS in one day.
Within the economic Sector Reform invoice handed in February, the one-yr transition period to the new FDS regime begins on July 1.
All the way through the transition length, advisers are required to supply an FDS masking a 12-month length as much as the day immediately earlier than the day the FDS is equipped.
“In essence, you might have sooner or later to concern an FDS,” the AFA referred to in an advisory to its members. “This compares with 60 days to difficulty an FDS both before and after the reform comes into force.
“We've been very adamant that it's without problems not viable to give an FDS in a single day and have equally been clear that it is inappropriate to take the chance, as any breach in terms of the content of an FDS or getting the amount incorrect would outcomes in the ongoing charge association being terminated.”
AFA says it has submitted a request to the Australian Securities and Investments commission (ASIC), urging the regulator to take a “facilitative compliance” method throughout the transition 12 months. The request was made jointly with the financial Planning affiliation.
“It's important to understand that ASIC does not have the powers to provide reduction,” the AFA said. “they could handiest take a facilitative compliance approach, the place they would agree now not to take any regulatory motion the place breaches occur.”
The AFA says a no motion position or facilitative compliance method with the aid of ASIC will no longer cease ongoing charge preparations from being instantly terminated if an adviser breaches the FDS requirements
It additionally does not stop different parties from taking motion.
“We are able to proceed to work with ASIC and the government on finding a potential solution,” the AFA said. “ASIC is additionally engaged on information for advisers, which they are going to unencumber as quickly as viable.”
