The Corporations Amendment (Future of Financial Advice Measures) Act 2012 came into effect on 1 July 2012.
The amendments will reform the current laws governing personal financial advice to retail clients, where an ongoing fee is to be charged for a period of 12 months or more.
The Act requires an advisor or fee recipient to discharge two separate obligations:
- provide a disclosure statement to the client outlining fee and service information; and
- provide a fee disclosure statement and a renewal notice to the client to continue charging fees for a period longer than 24 months.
The Act will also enhance ASIC powers to refuse or suspend a licence if an advisor is likely to breach his or her obligations, and to ban a person from providing advice.