The process for renewing Ongoing Fee Arrangements (OFA) has been simplified. These changes will commence on 10 January 2025.
Fee disclosure statement not required
Financial advisers no longer need to provide a Fee Disclosure Statement (FDS) to the client.
Consent Requirements under OFA
However, financial advisers will still need to obtain client consent to renew an OFA and to deduct fees from accounts (consent for both can be given in a single notice or form). The client consent must meet the new requirements listed in sections 962G and 962T of the Corporations Act – these requirements are explained here.
While consent continues to be required at least annually, there is now more flexibility in terms of the timing of renewing consent. The financial adviser and client can agree on a reference date for determining when the renewal starts. Consent can be given anytime between 60 days before and 150 days after the reference date specified in the consent (or if no reference date is specified, the anniversary of the date the OFA started).
If consent is not obtained from the client in accordance with these requirements, the OFA will terminate automatically.
If you have any questions about how the changes apply to your business, please contact us.
Further Reading
- An overview of the DBFO Package (Tranche 1)
- Overview of OFA Obligations
- RG175 – AFS Licensing: Financial Product Advisers – Conduct and Disclosure
- Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 ("DBFO Act")
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
