Ongoing Fee Arrangements (OFAs)

Ongoing fee arrangements (OFAs) are agreements between financial advisers and their clients where fees are charged on a regular basis for ongoing services. These arrangements are designed to ensure that clients receive continuous financial advice and support. To protect clients’ interests and ensure transparency, specific regulatory requirements have been established under the Corporations Act.

Prior to the changes listed in this document, Advisers were required to provide a Fee Disclosure Statement (FDS) annually, with the clients being required to opt into this arrangement at least every two years. This timeline has now changed to an ongoing basis with the annual provision of client consent to new OFA agreements, replacing the need to send FDSs once the transition period is complete, this is unpacked further in the below “January 2025 Changes”.

Financial advisers must comply with the obligations outlined in Division 3 of Part 7.7A of the Corporations Act. The obligations, effective from 10 January 2025, include:

  1. Annual Renewal of Ongoing Fee Arrangements: Advisers must seek the client’s renewal of the ongoing fee arrangement annually.
  2. Written Consent for Fee Deductions: Advisers must obtain the client’s written consent before deducting, arranging to deduct, or accepting deductions of ongoing fees from the client’s account.

Failure to comply with these obligations will result in the termination of the ongoing fee arrangement. 

If the fee recipient continues to charge ongoing fees after the termination, they will be in breach and subject to civil penalties.

For OFAs with an anniversary date before 10 January 2025, the previous FDS rules still apply. Advisers must provide an FDS within 60 days of the anniversary date.

For OFAs with an anniversary date after 10 January 2025, the advisers can provide the new consent form up to 60 days before the new reference day (or 10 January if the reference day falls less than 60 days after 10 January).

Please see the table below as a summary of this timeline:

Reference Date (previously known as Anniversary date)Earliest consent form can be given (up to 60 days prior to reference date)Latest due date of client signed consent form (max. 150 days post reference date)Next Reference date
January 202510 January 2025Mid- June 2025January 2026
February 202510 January 2025Mid-July 2025February 2026
March 2025January 2025Mid-August 2025March 2026
April 2025February 2025Mid-September 2025April 2026
May 2025March 2025Mid-October 2025May 2026
June 2025April 2025Mid-November 2025June 2026
July 2025May 2025Mid-December 2025July 2026
August 2025June 2025Mid-January 2026August 2026
September 2025July 2025Mid-February 2026September 2026
October 2025August 2025Mid-March 2026October 2026
November 2025September 2025Mid-April 2026November 2026
December 2025October 2025Mid-May 2026December 2026
  • Fixed-Term Advice Agreements: With the removal of the FDS, practices currently using Fixed-Term Advice Agreements (TAAs) may reconsider transitioning to OFAs. The main advantage of an OFA is the extended timeframes for clients to consent—unlike FTAAs, which cannot extend beyond their anniversary.
    • To transition from FTAAs to OFAs, clients will need to sign a new ongoing service agreement and fee consent.
  • Renewal Form Templates: At the time of the creation of this document, ASIC has stated that they will provide an example document for the new OFAs consent renewal form, but have not yet publicised this document, the new legislation currently allows licensees to create and utilise their own consent renewal form.
  • Principle of Disclosure: The new legislation focuses on transparency of fee arrangements in financial services. Therefore, the introduction of the new OFA arrangement is to provide clients with ongoing disclosure of service fees, and the opportunity to give ongoing informed consent.

 ASIC intends to provide an example consent form that includes sections on the amount of fees the client will pay, the reasons for seeking consent, how long the consent period lasts, how clients can withdraw it, the client’s account details, and signature.

This form can be used to provide the necessary written consent for ongoing fee arrangements.

Note: Providers have the discretion to accept this form, or request their own version be completed.

Changes to the services to be provided under an OFA require a variation of the consent or a new consent.

Replacing ‘anniversary date’ is the term ‘reference date’, which must be specified on the fee consent.

This is a future date that initiates the next renewal process:

  • This can be a maximum of 12 months from when you and your clients first entered the arrangement or for existing arrangements (the previous anniversary or reference date).
  • Each renewal sets the next reference date, which must also fall within 12 months of the previous reference date.

Consent can now be renewed within 60 days before and up to 150 days after the reference date.

For all advice fees charged to a super or pension account, fees must relate to personal advice about the client’s interest in the fund.

For super and pension accounts, a description of the services relating to personal advice about the interest in the fund may be required.

A clients’ consent is deemed to be terminated when:

  • The OFA is terminated, the consent ceases to have effect at the time the OFA terminates or
  • A new consent is given in relation to the OFA, the consent will terminate at the time the new consent is given.
  • The client revokes their consent
  • Consent is not received by the prescribed date (150 days from reference date).

The obligation to provide FDSs annually has been removed by the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (DBFO Act) for new OFA Agreements entered into after 10 January 2025.

All clients that entered into an OFA agreement prior to 10 January 2025 are to receive an FDS annually (no later than 60 days from the anniversary date) until transitioned into the new OFA agreement, that must include:

  • Fees paid in the previous 12 months.
  • Services provided during that time.
  • Fees expected in the next 12 months.
  • Services to be provided in the coming year. 

If you require any assistance, we can offer training for your personnel or a review of your compliance documents. Please don’t hesitate to contact us if you have any questions or if we can help you with any of your compliance matters.

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