Services advisers can provide for a fee

The Advice Fee Deduction Consent form and the product application forms will include a number of services which your adviser must include when requesting consent to deduct fees from your superannuation or pension account.

For superannuation accounts, these services are expected to include:

  • 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 expected to include: 

  • 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.

Changes to advice fee consent from 1 July 2021

The Financial Services Royal Commission made several recommendations in relation to how advisers and platforms monitor and charge fees for financial advice.

The Federal Government new legislative requirements effective 1 July 2021 include: 

  • ongoing fee arrangements are renewed annually 
  • advisers disclose in writing the total fees that will be charged, including a dollar estimate of the fees to be charged during the following 12-month period 
  • advisers set out the services that will be provided during the following 12-month period 
  • written consent is obtained from a client before fees can be deducted from a client’s account 
  • advisers provide the consent to a third-party account provider (if applicable) prior to the deduction of fees. 

Further, fees cannot be deducted from superannuation accounts unless:

  • the fee is in accordance with an arrangement that the member has entered into  
  • the member has consented in writing to being charged the fee, and 
  • the trustee has the written consent or a copy of the consent. 

Fee Disclosure Statements (FDS) will also show information for fees and services provided for the previous and coming year, rather than the previous year only.

Changes to GST treatment of adviser fees

In December 2023, the Australian Taxation Office (ATO) issued new guidance indicating that reduced input tax credits (RITCs) for adviser service fees are not eligible to be claimed by Superannuation Funds and Investment platforms. Superannuation Funds and Investment platforms are expected to comply with the ATO’s guidance, from 1 July 2024.

What is the impact of this change?

As a result of the ATO’s guidance, any GST collected on adviser service fees will generally cease to receive the benefit of RITCs going forward, which in certain circumstances is up to 75% of the GST payable.

When is the change effective?

This change will impact fees accrued from 1 June 2024 onwards as adviser fees charged through the platform are charged in arrears. In certain circumstances, fees accrued prior to June 2024 may also be impacted.

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