New advice fee consent rules have raised concerns about the administrative burden on advisers if trustees are free to write their own forms, with stakeholders calling for industry associations and product providers to agree on a central, standardised form that all can use.
ASIC released its advice fee consent instruments last week, which from July 1 will require advisers to get client sign-off to withdraw fees from funds.
Which side of the industry produces those forms, however, was not prescribed by the regulator.
If providers take it upon themselves, advisers could be forced to locate and complete a host of consent forms in different formats for each client, dramatically increasing the administrative burden.
Multiple industry associations are now calling for product providers to work with industry to come up with one form that all sides can use.
Financial Planning Association chief executive officer Dante De Gori, who is touring regional areas as part of the group’s national roadshow series, says the prospect of chasing forms for every provider is being actively raised as a major issue for advisers.
“The concern for us and the adviser community is if you have individualised forms for every product provider out there,” De Gori says.
AFA acting chief executive Phil Anderson says he “fully agrees” with standardising consent forms.
“With what is likely to be more than a million consent forms being completed every year automation, standardisation and streamlining will be critical,” Anderson says, noting that the technology behind the submission and processing of the consent forms should also be standardised.
FSC keen to referee
According to De Gori, the Financial Services Council would be an important participant in any effort to get funds, associations and advisers together, given their historical links with product providers. “The FSC would probably have to be in there somewhere,” he says.
According to an FSC representative, that’s a distinct possibility.
“With the release of ASIC’s legislative instruments now providing clarity around the requirements, we are open to working with any interested parties to explore opportunities for standardisation and simplification,” the spokesperson told Professional Planner.
“Ensuring alignment between advice fee consent and independence disclosure requirements to ensure a seamless consumer experience is a priority for FSC members.”
For its part, ASIC did provide examples of what should go into consent forms but refrained from being too prescriptive. The regulator did however signal its support for an industry-led solution.
“It is always open to fee recipients and/or industry as a whole to develop a standard consent form, provided that it complies with the law,” ASIC stated.
Need to move quickly
While the legislation doesn’t kick in until mid-year, De Gori says the issue is urgent as some providers are already producing their own forms.
“We are asking all the product providers in the marketplace to come to the table for the benefit of consumers,” he tells Professional Planner. “Ideally the advice associations, along with the FSC, ASFA, AIST and ISA would agree on a form that all advisers and product providers would be happy to accept.”
There is no pressing need for providers to produce their own forms, De Gori says, and no competitive advantage in doing so.
“If you believe consumers should have access to financial advice you should support the standardisation of these documents,” he says.
Super Consumer Australia director Xavier O’Halloran says it’s good when the industry “looks at things and sees how they can make them easier”.
If stakeholders worked towards standardised forms, O’Halloran notes, consumers should also be consulted. “We’d expect to see consumer testing on behalf of the associations if they want to get it right,” he says.
De Gori believes the issue presents a good chance for the industry to show it can come together and regulate itself when and where it’s appropriate.
“This is an opportunity to demonstrate how the industry can work together rather than it being dictated to by the regulator and the government,” he says. “That’s the call out here.”