Client fee consent

Guide to understanding Netwealth's online fee consent functionality and client consent requirements. 

Overview

Client Fee Consent and Netwealth

 

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.

Fee consent webinar

 

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:

  • The scenarios in which fee consent are required
  • How to provide consent for non-ongoing fee arrangements
  • How to provide consent for ongoing fee arrangements
  • Transitioning existing clients to these arrangements post 1 July 2021.

View presentation slides

Fee consent requirements

 

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.

   

Wealth Accelerator 
(no Wholesale certified supplied)

Super Accelerator
(Pension)
Ongoing Renewal
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)
Fee consent options

 

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
  Super Accelerator Yes* Yes No
Ongoing fees Wealth Accelerator Yes* Yes Yes
  Super Accelerator Yes* Yes Yes

*option not available for jointly controlled accounts see electronic consent for more information

 

Netwealth electronic consent

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:

  • An individual whose Netwealth username has access to one or more accounts where they are the sole signatory on the account (such as an individual with a Super Accelerator and a Wealth Accelerator account where they are sole signatory on each account)
  • An individual with a Wealth Accelerator account in the name of an entity that has been set to ‘one-to-sign’ via the application process.


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 than one individual sharing the same Netwealth username (such as a husband and wife each with a Super Accelerator account linked under the same username)
  • A client with a Wealth Accelerator account in the name of an entity that has been set to require 'more than one to sign' via the application process.
  • A Wealth Accelerator account held in joint names that has been set to require 'more than one to sign’ via the application process.


More information on electronic consent will be available next month, and this page will be regularly updated on an ongoing basis.

 

Netwealth fee arrangement form

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.

 

Adviser/third party consent form

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:

  • It clearly identifies the account to which the consent applies
  • It clearly states the anniversary date
  • The fees consented to clearly match the existing fee arrangement on the client’s account or fees on the instruction provided to us by the client
  • The adviser / fee recipient clearly matches the adviser on the fee instruction
  • It has been signed by the account holder(s)

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.

FAQs

Frequently asked questions

 

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:

  1. Load this anniversary date against the client account;
  2. Let you know 30 days prior to the anniversary (renewal) date (12 months after the initial anniversary date), that your window to provide consent is now open. This notification will be performed via a task on your dashboard.
  3. You may renew the fee via the 3 options to provide consent as mentioned above

To continue paying fees under an ongoing fee arrangement we must receive a copy of the correctly completed consent within 150 days from the anniversary date. Ongoing fees will continue to be paid during this 150 day window.

  1. If consent is provided to us within the 150 day window, the fee will continue and this process will repeat on the same anniversary date the next year.
  2. If the consent is not provided to us before the end of the 150 day window , Netwealth will be required to turn off the fees. Fees will cease to be deducted from the client and cease to be paid to you from the 150th day.


Note that if a client provides you with a notice that they withdraw their consent or they do not provide renewal of their consent, then the fee arrangement is terminated. You must notify us of the termination within 10 business days.


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.

  1. If you provide a valid accountant signed wholesale certificate before 1 July 2022 then a consent will not be required.
  2. If you have provided us with the required Wholesale/professional investor documentation, but it expires in the transition period (and you wish to charge an ongoing advice fee from their account) then you will need to provide a new valid accountant signed wholesale certificate before 1 July 2022. If we do not receive an updated certificate then your client will be treated as a retail client and a fee consent will be required before 1 July 2022.

*Example of a transitional arrangement as it applies to existing wholesale clients with an ongoing fee arrangement

On 1 July 2021 your client is an existing wholesale client with a valid accountant’s certificate. The client has a fee arrangement in place on their account. As they are a wholesale client they do not need to sign a consent (either at account opening, fee commencement or renewal).

In Sept 2021 the wholesale certificate lapses (and the client becomes a retail client). Because the client is an existing client with an existing arrangement in place, transitional rules apply therefore we can continue to charge the fee up until 1 July 2022. If the Wholesale certificate is not supplied, and consent is not provided on or before 1 July 2022, the fee arrangement will lapse, and a new fee arrangement would be required to reinstate the fee.

New wholesale clients being set up from 1 July 2021 will be subject to the new rules

When setting up a new wholesale client from 1 July 2021, is important that you provide us with a valid wholesale certificate with the application to avoid the need to provide consent when establishing the ongoing fee arrangement.

If we do not receive the wholesale client documentation, then the client will be treated as retail and a consent will be required before we can start the ongoing fee.

Wholesale clients beyond 1 July 2022

Post 1 July 2022, it is also important to ensure that the wholesale certificate you have provided to Netwealth has not expired. Where a wholesale certificate expires after 1 July 2022, the client will become a retail client from that time and any existing fee arrangement will lapse. Because the client becomes a retail client a new fee arrangement and consent would be required to reinstate the fee.

To help you manage this Netwealth notifies you of an expiring wholesale certificate as a task on the adviser dashboard 30 days prior to expiry. Wholesale certificate expiries can also be tracked using the ‘supplementary account details’ report.

Click here to view/download the forms required to be set up as a wholesale investor on the platform 

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:

  1. Adviser/dealer: The 'Client Fees’ bulk report
  2. Client: The 'Adviser Fee Statement' and 'Client details' reports


More information coming soon, and this page will be updated when available.

Need help?

If you have any questions or would like to learn more about any of these changes, our friendly team of BDMs can help.

Speak with a BDM