Colonial First State has fired a subtle salvo at advisers with an overt reminder to clients who sign Adviser Service Fee notices that they can end their advice relationship at any time.
In a notice seen by Professional Planner, the wealth arm of the Commonwealth Bank is sending superannuation members who sign ASF notices an acknowledgement that contains relevant information about the fees charged on the account, plus an unprompted invitation to cancel the arrangement.
“You can review these fees with your adviser at any time,” the notice says. “You can also review or remove them at any time by contacting us.”
The move has been poorly received by the advice community, with advisers expressing frustration to this publication that a product provider would arbitrarily reiterate to members how and when they can sever the advice relationship.
Some advisers believe the inclusion of the line is a subtle yet subversive act by the provider, who has made several key moves over the last year to align with their members while distancing themselves from their historical reputation as an adviser-friendly provider.
The move reinforces an industry perception that the provider wishes be seen as a member-focused, rather than an adviser-focused organisation.
CFS has denied this implication, with a spokesperson saying both advisers and members are important to the provider.
“CFS remains a strong advocate for quality financial advice and supports the role that financial advice plays in helping Australians achieve financial well-being,” the spokesperson added.
CFS has been very clear in its recent strategy of moving hard and fast to support its member base.
In October CFS became the first major fund to front-run pending legislation requiring advised members to sign AFS forms, with the firm giving advisers 90 days to submit forms signed by clients or fees would be stopped.
This was eight months before the proposed legislation on AFS notices was due to start on June 30, 2020. The legislation will now be delayed until at least August, when parliament sits again after being forced to go on hiatus due to the coronavirus crisis.
The early move from CFS was prompted by a joint letter from the regulators calling the proactive fee authorisation “best practice”.
In December 2019, advisers were sent a list of clients CFS require updated consent for.
CFS was similarly early to start culling grandfathered commissions from its books, facilitating trail rebates available across all products as early as January, 2019. Legislation to end grandfathered commissions by January 1, 2021 wasn’t passed by Federal Parliament until October 14, 2019.
The group then backed up this move in March this year, ceasing to pay grandfathered commissions to licensees for managed investment funds. Additionally, it announced an end to grandfathered commissions on a host of its products from May 1.