Understanding advice fee consent

Consent must be obtained before certain types of adviser service fees can be deducted from your retail client's account. Under legislative requirements, effective 1 July 2021, consent must be obtained in a format compliant with the ASIC instruments and contain prescribed information (e.g. about the services being provided to your super and pension clients, and a fee estimate where the amount is unknown).

These rules apply to IDPS, superannuation and pension accounts.

For ongoing adviser service fees, client consent should be renewed annually. We'll stop the deduction of advice fees at the time the consent expires (as set out in the form) if a subsequent consent isn't received. The consent period will typically end 150 days after the reference date  for an ongoing fee arrangement.

Advisers can account for indexation through this annual consent process by setting increases to ongoing fees at this time.

Please note, these changes to advice fee consent don’t apply to your clients’ Cash Management Accounts (CMAs).

To find out more about the changes in advice fee consent legislation, see please visit Understanding DBFO legislative requirements or visit the ASIC website.

The Advice Fee Form is used to renew, add, update or remove advice fees on any account type (Super, Pension or IDPS). The online form can be used to set advice fees on an account that calculates on the balance of the account or the balance of the fee group. For retail clients, it also captures the advice fee consent requirements that apply where personal advice is provided under an ongoing fee arrangement.

Where your fees are not changing and you're renewing an ongoing fee deducted from an IDPS account, you can upload your own advice fee consent document into the Advice Fee Form. Our Advice Fee Deduction Consent Form will not be sent to the client as you have already collected consent.

The Advice Fee Form must be used for all advice fees deducted from superannuation accounts to ensure there is a valid consent in place before fees are deducted. Further information on trustee obligations in relation to advice fees and superannuation is set out in this letter from ASIC/APRA to trustees. 

The legislation requires all account owners to provide their consent.

The Advice Fee Form, the product application forms and the product switch form will include a number of services, which advisers must include when requesting client consent to deduct fees from their Super or Pension account.

For Super accounts, these services are:

• Periodic review of a superannuation account
• Strategic superannuation advice
• Management and administration of a superannuation account
  • Superannuation investment portfolio:
  • establishment and implementation
  • review and maintenance
  • corporate actions
• Superannuation contribution strategy
• Insurance in superannuation strategy
• Superannuation withdrawal advice and management.

For Pension accounts, these services are:

• Pension establishment and commencement
• Periodic review of a pension account
• Pension management strategy
• Management and administration of a pension account
• Pension investment portfolio:
  • establishment and implementation
  • review and maintenance
  • corporate actions.

These service lists were developed after discussions with a number of financial adviser and dealer firms. While they may not align exactly to your current service offering, we’ve kept the service descriptions broad so they can fit alongside most adviser service offerings.

The advice fees set up on your client's account as at the end of a given month (or as at the day when your client’s account is closed) will be the fees applicable for that month (or part thereof if the account is opened or closed within that month). These fees are charged to your client's account on approximately the 3rd business day of the following month (or upon account closure).

Please ensure you have sufficient cash in the account, inclusive of the cash minimum, the administration fees and the adviser service fees.

If there is an insufficient cash balance to pay the advice fees, we may sell or draw down assets as described in the relevant PDS or IDPS Guide to cover outstanding fees. Unpaid fees will accrue and be charged in the future fee runs, provided there is sufficient cash to cover both the current and previous month's fees.  

When a new account is opened, advice fees will be charged based on the advice fee structure agreed between you and your client:

• Flat dollar fees: Fees will accrue from the date the account is opened.
• Percentage fees: Fees will accrue from when the funds arrive in the account.

All advice fees must be provided to us exclusive of GST. We will collect 10% GST in addition to the base fee you and your client have agreed on (which is exclusive of GST).

We start calculating and processing advice fees from the first business day of the month. From the time of calculation, processing and then payment to the advice licensee, this may take up to 10 calendar days and is generally paid within three business days from the time the fee is deducted from the client’s account.

Please consider the time taken to transfer funds between banks and your advice licensee’s processes when on-paying any fees to you.

One-off advice fees will be paid out as part of our monthly fee run. This means, if the fee run has ended and we receive a request for a one-off advice fee on the 7th business day of the month, this will be charged during the regular fee run on approximately the 3rd business day of the following month (or upon account closure).

If there is an update to an advice fee within a month, the updated fee will be used to calculate the fee for the whole month. That is, the old advice fee will not apply for the part of the month for which it was initially loaded.

Should you need to refund your advice fees to a client, you’ll need to contact us to start this process.

All fee refund requests are subject to review. If approved, we'll calculate the value of the refund (including RITC treatment) and confirm the appropriate method. More information may be required.

If you have full transact authority for your client, you can request a refund by emailing us at wrapsolutions@macquarie.com with the following details:

• the timeframe,
• the reason for the refund, and
• what the fee should have been

This process will involve a fee recalculation and may require additional approvals pending the nature of the request.
 

We require you to have an ongoing fee arrangement in place with your client at the time of preparing the consent form. Ongoing fees can be renewed up to 60 days in advance.

Our Advice Fee Form provides guidance to help you complete the form, so you can correctly align the anniversary dates and/or update fees in advance.

You can renew fixed term fees up to 60 days in advance. You can align the start date to the end date of the existing fee consent, provided the new start date is not more than 90 days in the future.

Where the new consent period starts before the existing consent period ends, the new consent will replace the existing consent.

Our Advice Fee Form provides guidance to help you complete the form, so you can correctly align the anniversary dates and/or update fees in advance.

We don’t pay advice fees for retrospective periods. Where the start date is in the past, the fee will be paid from when the Advice Fee Form is processed.

You can generate a fee summary in Adviser Online. This will give you an overview of your client’s fees including their:

• adviser fees
• admin fees 
• fee exclusions
• group details 
  • group name
  • group fees 
• Advice Fee Consent (AFC) fee arrangement details.

You can also find the AFC form from the fee summary page.

To see your client’s fee summary profile:

1. Log in to Adviser Online
2. Search for an account using the global search bar
3. Click the Fee profile tab.