Client fee consent
Guide to understanding Netwealth's online fee consent functionality and client consent requirements.
Under the Financial Sector Reform Act 2021, new requirements for adviser fee consent and renewal come into play from 1 July 2021. These new requirements have the potential to impact significantly on the implementation of fees paid by clients for advice and the processes we need to apply.
These rules mean that, in some circumstances, you must receive a written consent from your client to enable you to arrange the deduction of advice fees from their Netwealth account. And this consent must be reviewed each year.
Whilst new obligations are being finalised, we can confirm that Netwealth’s process of obtaining fee consents aims to be as seamless as possible and to help you reduce the administration and compliance burden on your business.
This webpage will be updated on a regular basis as new information becomes available, and you will be notified of updates to the page via the login pop up message.
In this presentation, learn how Netwealth aims to reduce the administration and compliance burden on your business as a result of the new client fee consent requirements that come into play from 1 July 2021.
Watch as we discuss:
Netwealth requires fee consent from your clients on certain ongoing and non-ongoing fee arrangements, with ongoing fee arrangements also requiring annual renewal.
A summary of where client fee consent is required to be sent to us is set out below.
If you have a wholesale client with a Wealth Accelerator account see below FAQ for more information.
|Non - ongoing fees||Fixed term advice fee||No||Yes||n/a|
|Once only advice fee||No||Yes||n/a|
|Upfront advice fee||No||Yes||n/a|
|Ongoing fees||Ongoing advice fee||Yes||Yes||Yes|
|Advice fee ASX share trades||Yes||Yes||Yes|
|Ongoing advice fee - insurance (Super only)||n/a||Yes||Yes (Super Accelerator Only)|
If fee consent is required, the following options are available dependent on the fee arrangement, account, and ownership structure.
Netwealth Electronic Consent
|Netwealth form||Adviser/Third party Fee Consent form|
|Non - ongoing fees||Wealth Accelerator||n/a||n/a||n/a|
|Ongoing fees||Wealth Accelerator||Yes*||Yes||Yes|
*option not available for jointly controlled accounts see electronic consent for more information
Netwealth is building out new online fee consent functionality to allow clients to provide fee consents electronically without the need for paper forms or wet signatures.
The functionality will be available to clients who have full signatory rights on account(s) held under their Netwealth username. An individually controlled account includes:
Where an adviser submits an electronic consent for jointly controlled account(s) a Netwealth fee consent form will be generated for client signing. A jointly controlled account includes:
More information on electronic consent will be available next month, and this page will be regularly updated on an ongoing basis.
Netwealth is updating our change of fee forms to include fee consent which can be used to establish both ongoing and non-ongoing fee arrangements.
All forms will be updated shortly, and this page will be updated when available.
Ongoing Fee arrangements - Where a client consent form has been created by a third party that is not Netwealth, we will accept it for ongoing fee arrangements where the fee consent form meets the following requirements:
Please note, it is your obligation to make sure your consent follows the requirements set out by the legislation/ the ASIC instrument. Netwealth will not assess whether the consent complies with regulatory requirements and acceptance of a consent by Netwealth should not be taken as endorsement of the legal validity of the consent
Non ongoing fee arrangements - Third party fee consent forms cannot be used for non-ongoing fee arrangements see below FAQ for more information.
An ongoing fee arrangement allows you to arrange the deduction of a fee from a client’s account for the provision of personal advice, where the arrangement is intended to continue for more than 12 months. All ongoing fee arrangements must be supported by a consent from the client to the adviser to allow the adviser to arrange the deduction of the fee.
Where a fee arrangement is not intended to apply for more than 12 months, then the consent requirements differ for superannuation and non-superannuation accounts.
Consent is not required for non super accounts.
For super accounts, a consent is required for non-ongoing fees. The consent is addressed to the trustee of the fund and consents to the trustee arranging the deduction of the fee. The consent must include a statement of the services for which the fee is paid.
If you have existing ongoing fee arrangements in place with Netwealth, your fee will continue to be paid. You will have 12 months from 1 July 2021 (until 1 July 2022) to obtain a fee consent from your client and provide this to Netwealth to ensure that your ongoing fee arrangement will continue.
For ongoing fee agreements entered into before 1 July 2021 and fee deduction has not yet started, we will continue to accept these fee instructions 1 July 2021 to 31 July 2021 For any ongoing fee arrangements that you enter into with your client after 1 July you must provide us with a fee consent. From 1 August 2021 we will require a consent to be provided for all new ongoing fee arrangements.
Information on renewing ongoing fee arrangements and online guides and support will be updated over the coming months. The below information is accurate as at the time it has been provided, but may change closer the date of the first renewal.
Fee renewal is based on the anniversary of the date on which you entered into the fee arrangement with the client. For existing arrangements (before 1 July 2021) this will be the date (in the 2021/22 financial year) that you provide the client with a Fee Disclosure Statement.
When you submit your fee consent via one of the methods mentioned above, you will provide us with the anniversary date (also known as the fee renewal date).
To help you manage the renewal process, Netwealth will:
The requirement to provide a fee consent generally does not apply to wholesale clients. Netwealth will not require you to provide a fee consent where you have provided us with the required wholesale/professional investor documentation and that documentation remains current.
Transitional arrangements* applying to existing Wholesale clients until 1 July 2022
If you have not provided us with the required wholesale/professional investor documentation and you wish to charge the client an ongoing advice fee, then your client will be treated as a retail client and we will need to receive a copy of their consent by 1 July 2022.
For Super Accelerator, consent to deduct the non-ongoing fee is required from the client to Netwealth as trustee, and Netwealth must validate the services being provided are appropriate for super. As such, clients must provide consent or using Netwealth’s electronic consent option or via a netwealth form, as mentioned in the above two options.
To help you track your fee arrangements, we are updating the online fee profile and client fees pages to make it simpler to view current and historic fee arrangements.
The following reports with ongoing fee arrangement details will include fee consent information, and the anniversary date: