Understanding DBFO legislative requirements

Following the introduction of the Delivering Better Financial Outcomes and Other Measures Act 2024, effective 10 January 2025, we updated our advice fee consent forms to meet the new legislative requirements.

The following changes to our forms applied to all fee arrangements:

• To meet the new regulatory requirements, our forms now capture the cost of advice, in addition to the costs that will be deducted from a client’s account.
• We’ve added a section for you to input services for IDPS accounts which helps you meet your requirements if you wish to rely on one form for your clients only.

In addition, we’ve made the following changes for ongoing fee arrangements, in line with the new legislative requirements:

• The ‘anniversary date’ for each ongoing fee arrangement has been replaced by a ‘reference date’. There is additional flexibility to allow the setting of a reference date that is sooner than the default one year.
• The renewal period for ongoing fee arrangements has been updated so that they can only be renewed between 60 days before and 150 days after the reference date.

New laws require you to disclose the amount to be paid for the advice and the amount to be charged against the account to your client.

The fee estimate to be paid for advice is the cost to your client for the advice per the fee arrangement. This may be the same as the amount to be charged against your client’s account.

However, there are also cases where these amounts may differ. For example:

• You may choose to directly invoice your client so that only a portion of the advice fees under your arrangement is charged against the Wrap account
• You may split fees under your arrangement across multiple Macquarie Wrap accounts.

If the amounts are the same, there’s an option within the online form to use the same figure for both.

The renewal period for existing fee arrangements has changed to 60 days before the reference date and 150 days after.

If you or your client can’t renew your arrangement during this period, you can let the current arrangement expire and terminate, or you can start a new arrangement and specify a reference date during a period in which you and your client can renew the arrangement. If you start a new ongoing or fixed-term arrangement on an account, any prior ongoing or fixed term fee arrangements on that account will terminate. 

If you need to change any material details in your fee arrangement, this will require you to start a new arrangement, which will terminate the existing arrangement.