1. Introduction
Fee Disclosure Statements (FDS’) are legislated requirements under the Corporations Act 2001 with the most recent changes to this legislation coming into effect 1 July 2021.
The documents and associated processes intend to ensure clients in an ongoing fee arrangement have transparency on the fees paid for advice services.
AdviceOS supports FDS processes by allowing advice services. associated fees and dates to be tracked against a client. This information can then be generated into a FDS template quickly and easily.
This document outlines the functionality to support FDS legislation from 1 July 2021 onwards.
1.1. Processing FDS' in AdviceOS
The order in which FDS activities are performed in AdviceOS is important to the efficient and accurate generation of FDS’.
To best leverage the FDS functionality, Midwinter recommends the following steps be followed within AdviceOS:
1. Setup ongoing service agreement.
2. Record service delivery.
3. Close the service period or cancel agreement.
4. Review consent setup
5. Generate the FDS. Record consent or cancel agreement.
When complete, this process can be expected to repeat from step two until consent lapses, is withdrawn or the agreement is otherwise cancelled.
This user guide outlines the above steps and how to complete them in AdviceOS. In addition to these steps, there is also segment/package and date configurations that will impact the FDS process which can be reviewed within the Settings section of the Help Centre.
1.2. Where to find FDS functionality
All the steps to manage FDS obligations for a client can be found in the Advanced Admin > FDS Management module of AdviceOS.
Each page in the module is aligned to a step in the recommended FDS process for AdviceOS.
The pages related to FDS processing are:
1. Setup agreement – allows a user to setup the ongoing service agreement for a client/client group.
2. Manage advice services – allows advice services to be recorded and the service period to be closed.
3. Manage advice fees - allows advice fees to be recorded for the relevant service period.
4. Generate FDS - provides the ability to generate a FDS.
5. Reporting - the ability to run reports on your clients related to FDS
6. FDS history - a file note history for all FDS' are a Licensee, Practice or User level
7. Manage Consent – provides the ability to record client consent for the next service period.
2. Setting up an Ongoing Agreement
To setup a new ongoing service agreement navigate to Advanced Admin > FDS Management > Setup Agreement.
The agreement setup requires two sections be completed. The following sections detail how to complete the setup by completing the agreement details (part 1) and setting reminder dates (part 2).
2.1. Creating the agreement
An agreement can be setup for either an individual or the client group. To setup an agreement, select the client from the drop down Agreement with and click the Create service agreement button in the top right-hand corner of the page.
Agreements must be setup for individuals or the client group. If there is an active individual agreement, there cannot be an active joint agreement.
2.2. Setting the agreement details
To complete the first part of the agreement setup, users must enter the basic details of the agreement. These details are used to create the first service period.
The agreement details screen captures the following details about the ongoing service agreement.
- Date commenced - captures the date a clients agreement started. The first service period starts on this day and the first anniversary day is 12 months from this date
- Service package - The segment/package associated with the client agreement. The selected package will determine which services are shown to the client in each service period.
- Service cost - captures the expected cost of the agreement for the next 12 months. This value is shown as the default estimated value for the future service period and is shown in the default FDS template as guidelines for estimated costs.
- Payment method & frequency - captures how the client has or will pay for the agreement and how often. This value is recorded for reporting purposes only and does not impact the agreement.
Note that you cannot change a service package of a service agreement once it has been created. If you wish to change service package, the existing agreement must be cancelled and a new agreement created.
2.3. Setting reminder dates
Reminder dates allow for compliance activities to be flagged as due before the actual legilsated date. When setting up an agreement reminder dates are automatically set up to equal legilsated due dates, however licensee and practice defaults can be configured in Settings > ongoing fee reminders > fds reminders.
These reminder dates can be used to trigger the creation of specific tasks or workflows, and can be overridden as required. For more information on tasks and workflows we have a separate user guide you can review.
There are four types of reminder dates which are all mandatory.
- Anniversary - 1 year from agreement start date - The first milestone indicating a service period has ended and FDS related activies must begin.
- FDS Due - 60 days after anniversary date - The last day an FDS can be sent to the client
- Fee Consent - 120 days after anniversary date - The last day a client has to provide consent before the fee shutoff process must begin
- Fee Shutoff - 150 days from last anniversary date - The last day to stop charging fees before a breach occurs
While you can set up the licensee or practice default reminder dates, you can also override any relevant date as required. Note that this will not change the legilsated due dates as these are locked in place, they will only override the date that AdviceOS may trigger reminders.
In the example below, the FDS due date has been overriden and the reminder date changed to 1 month prior to the legislated due date.
AdviceOS will not prevent users from setting a reminder date that falls outside the legilsated timeframe. If a reminder date is outside the legislated timeframe a warning will appear next to that date.
3. Recording service delivery
To record service delivery navigate to Advanced Admin > FDS Management > Manage Advice Services.
Once an agreement is setup, the manage services page will display the current service period. Historical service periods are will also be accessible from this page.
The page displays basic information about service periods as well as all services assigned to the client/client group for that service period.
You can navigate between the different service periods using the drop down option, which will list all Historical, Current and Future periods that may exist. The Key Service Period dates will update below based on the service you are reviewing.
3.1. Managing Advice Services
The second section of this page displays all services for the selected service period. For active service periods, users will be able to mark services as received and record the date of the service delivery. This information will flow through into the FDS document when generated.
The services that appear here are directly related to the Segment chosen when creating the service agreement.
You can mark services as received, the date received, frequency and when due. You can also tick Show Adviser Benefits to add additional manual benefits if applicable.
You can navigate between other package details using the drop down package benefits. By default this will be selected on the package chosen for your client. These benefits are all entitled by default for your client, however navigating between other packages you may noticed some services that are not entitled.
3.2. Managing Advice Fees
The managing advice fees section allows you to update and manage any advices fees charged for your relevant client. All automatic or manual fees will appear within the generated FDS document.
You can filter for a specific timeframe. By default it will choose the service period date range you are currently on. Depending on your practice or licensee, you may have a number of different revenue types which you can also filter here.
If a specific fee is not appearing in the list, likely it is due to incorrect date ranges or not having that revenue type selected. Please check both these settings first.
You can manually add any additional revenues that are not automatic using the +Add button.
When adding a manual fee, you can choose whether it is excluded from the FDS report, the relevant date, owner of the fee, type and total cost.
4. Rolling the service period
Once all services and fees have been updated for your client, you can roll the service period.
Navigate to Manage Advice Services and clicking ‘Roll to next’ allows a user to record that the current service period has ended. From this point a user has an opportunity to cancel or continue the agreement. In either case, as user must review and complete information to proceed
The notification that appears allows you to either continue or cancel the ongoing service agreement.
4.1. Continuing the Agreement
To continue the agreement, users can simply click ‘Save’ on the dialog as all defaults are aligned to the user’s configured defaults. A user can override the service period and reminder dates if required. The new service period will have a status of ‘Future’ while the existing will remain as 'Current' for now.
- The new service period start and end dates will reflect a 12 month period, beginning from the end of the current period.
- Reminder dates will default based on the configured defaults for the user.
- A default filenote is populated based on the dates in the dialog. User’s can also replace the text if desired.
A service period can end without all services being marked as received, however a warning will display if all services are not marked as received
Closing a service period must be done before an FDS is generated. Closing the service period ensures that both the previous and next 12 months of service will display in the FDS as per the current legislation.
4.2. Cancelling the Agreement
To cancel the agreement, tick the checkbox at the top of the dialog and update the cancellation date. By default, the cancellation date will be the current date, but can be adjusted.
A note is provided to add any relevant comments. Cancelling the agreement will deactivate the agreement and any service periods associated.
5. Generating an FDS
To generate an FDS navigate to Advanced Admin > FDS Management > Generate FDS. For arrangements under FDS rules post 1 July 2021 this should only be done once the current service period has been closed and a pending service period has been created (refer to previous section) by rolling to next.
The drop down at the top of the page allows an entity to be selected. Users can select either an individual or joint depending on the active ongoing arrangements.
To generate an FDS, users need to review the previous and current/future period drop downs and then click ‘Print Statement’, selecting the relevant custom or standard template. By default, the service period drop downs will be set to the most recent, however this can be changed to adjust the generated document content.
Using custom dates
In the event dates other than the default need to be selected, users should check the ‘Use custom dates’ checkbox. Four date fields will display.
Rather than using start and end dates from service periods, custom dates will be used populate the FDS. The previous period dates relate to the ‘last 12 months’ and the future period to the ‘next 12 months’ in the FDS document. A read-only ‘number of days’ indicator shows the number of days between the start and end dates for reference.
The template will populate fees based on the revenue date recorded in AdviceOS. If the revenue date is between one of the periods start and end dates (inclusive) then the revenue record will display in the template. Similarly, the template will populate services based on the date received or if not yet received the due date.
Legislated and reminder dates will be populated in the template based on the earliest (for the previous dates) and latest (for future dates) period within the date ranges selected.
You can also include the estimated fees for the next 12 months to be generated in the FDS via Advanced Admin > FDS Management > Generate FDS and opening up View summary of FDS to fill in the estimated fees.
Once you are happy with everything on this page, click Print Statement and select the relevant template.
5.1. FDS provided date
The FDS provided date will automatically populate when an FDS document is generated. It will always set the date to the current date when an FDS document is generated. The field can be overwritten as required. The FDS provided date is for record keeping and does not alter other FDS functionality.
FDS Settings
There are several settings that by default should not need to be adjusted unless completing an FDS in AdviceOS for the first time. These settings are generally the same for each FDS a user generates, however can be adjusted for a single FDS should this be required. These settings are:
- Service period - Identifies which service period should be used to generate the FDS. Unless generating a historical FDS, this should be set to the latest service period.
- Group by - Determines how the revenue records are totaled for the FDS. Options include, grouping by adviser policy or by policy number. This setting should not be changed without an understanding of how revenue records are imported or added to AdviceOS.
- Revenue types - Determines which revenue types are included in the total fees for the FDS. This setting should not be changed without an understanding of how revenue records are imported or added to AdviceOS.
It is recommended that the 'Group by' and 'Revenue types' fields not be updated without understanding important and/or manual revenues in AdviceOS. Fee totals in an FDS may not match actual values if setup incorrectly. If any fees do not appear in your FDS it may be due to the revenue type not being selected here
6. Recording consent
To record client consent navigate to Advanced Admin > FDS Management > Manage Client Consent. This page intends to capture a client’s agreement to proceed with the next 12 months of service. The drop down at the top of the page allows an entity to be selected, whether that is joint or individual.
Once an entity has been selected, users should decide whether consent for the next service period must be captured at a platform or client level.
You can choose to consent by platform or by consent by client by either ticking or unticking the consent by platform field. Any platforms you wish to consent by need to be existing platforms, which can be created within Client > Fact Find > Super, Pension & Investments.
Both the response and date of response are required, however an ‘N/A’ option is available should there be a platform that is not relevant to the capturing of consent.
6.1. Finalise consent
There are several response options that users can use to record a client’s response to their FDS.
Once you have chosen the relevant consent, to finalise the consent for that period you need to either Continue agreement or cancel agreement
Continuing the agreement will set the latest service period status from Future to Current. AdviceOS will prompt the users to confirm this action before continuing, as you will not be able to reverse this choice and the consent provided will be locked.
6.2. Fee shutoff
On the manage client consent, it is possible to record when fees where stopped. This can be done for any client or platform.
To record the fee shutoff date, the, Stop fees checkbox must be selected so that the date field displays. The fee shutoff date is for record keeping and does not alter other FDS functionality
Transitional arrangements
The transition period is specified under the legislation and prescribes when and how the new rules will apply to existing arrangements.
Under the legislation, an existing arrangement is defined as any ongoing fee arrangement started before 1 July 2021. In short, all existing arrangements will have transitioned to the new rules on or before 30 June 2022.
To transition an existing FDS agreement, users need to roll the service period from the Advanced Admin > FDS Management > Manage Advice Services page. To do this correctly in AdviceOS, users should know the date that the FDS will be provided to the client before starting.
From the Manage Services page, ensure all details regarding service completion are correct and then click the ‘Roll to next’ button. On the roll to next dialog, it is critical that the next service period start date is the day the transitional FDS will be given to the client. The next anniversary date should be the same day, one year in advance.
By manually setting the anniversary date, all future service periods will be correctly set under legislation in force from 1 July 2021.
Important - Users should verify that all dates are correct before proceeding. When updating the period start date and anniversary date, other editable fields (including the filenote) will not be automatically updated. When the anniversary date is changed, legal due dates will be updated and can be used as a reference point.
This is a one off exercise and does not need to be done once the first FDS is provided after 1 July 2021.
7. Appendix
Whilst Midwinter endeavours to adopt legislated terms where practical, some terms may take on special meaning within the context of AdviceOS. To this end several key terms have been outlined below for clarity.