New fee guidelines for financial industry
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Clients of financial advisers will find it easier to determine if they are getting value for money under new guidelines issued by the corporate watchdog.
Advisers will be required to issue a fee disclosure statement to clients from From July 1, 2013, as part of new reforms being introduced across the financial services industry.
The disclosure statements will include information about the fees being paid by a client, the services that client has received, and the services that client was entitled to receive, the Australian Securities and Investments Commission (ASIC) said on Friday.
These measures will help customers work out if the fees they are paying are proportionate to the services they are getting, it said.
The Financial Planning Association (FPA) welcomed the new guidelines as a "common sense approach".
But chief executive Mark Rantall said a requirement for advisers to provide retrospective fee disclosures for existing clients would create costly duplication for the industry.
"We would argue for further discussion and a quick resolution to the downside consequences of this approach in its current form," he said.
ASIC said it would facilitate changes to greater disclosure in the first 12 months of the new regulations.
"We expect industry participants to make a reasonable effort to comply with the new regime, and we will take a measured approach where inadvertent breaches arise, or system changes are underway," ASIC commissioner Peter Kell said.
"However, where we find deliberate and systemic breaches we will take stronger regulatory action."