Policy Issues

Obligations for financial planners – Item 54 reporting entities  Financial planning licensees are considered item 54 reporting entities under the AML/CTF Act as they make arrangements for their clients to receive a designated service from other AUSTRAC reporting entities, such as product providers (rather than provide other services themselves).  Item 54 reporting entities are required to adopt and implement throughout their business a Part B of an AML/CTF program. The main aspects of a Part B AML/CTF program include:  Customer due diligence (CDD) procedures   ML/TF risk management assessment  Suspicious matter reports (SMR) for any transaction or interaction that makes you

Life risk advice remuneration  The Corporations Amendment (Life Insurance Remuneration Arrangements) Bill 2016 put in place arrangements, known as the Life Insurance Framework (LIF), to transition life risk advice providers from high upfront commissions to either a hybrid commission, level commission or a Fee for Service remuneration model when providing life risk advice service.   The law permits a certain level of allowable upfront commissions to be paid to financial planners who provide life risk advice, as long as ‘clawback’ arrangements are met where a portion of the upfront commission is paid back to the life insurer by the financial planner

The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 inserted a Retirement Income Covenant into the SIS Act.   The Covenant requires registrable superannuation funds to develop a retirement income strategy that outlines their plan to assist members who are retired or are approaching retirement to achieve and balance the following three objectives:  maximising their expected retirement income;  managing expected risks to the sustainability and stability of their expected retirement income; and  having flexible access to expected funds during retirement.  Trustees will need to evaluate the products they offer to their members and investigate whether their product offerings can be improved to

The Government’s My Aged Care website includes fee estimators for Home Care and Residential Care that allow people to estimate the amount they may need to contribute towards the cost of their residential care or home care package. Further information about aged care requirements and charges, as well as information materials, are available to download from the My Aged Care website. For personalised assistance, please encourage your clients to call My Aged Care on 1800 200 422 or visit www.myagedcare.gov.au.

What is the existing record-keeping obligation? ASIC Class Order [14/923] Record-keeping obligations for Australian financial services licensees when giving personal advice (the ‘principal class order’) imposes specific record-keeping requirements for Australian Financial Services (AFS) licensees when the licensee or their representative gives personal advice to retail clients. AFS licensees must ensure that, in relation to the provision of personal advice, certain records are kept that demonstrate compliance with the best interests duty and related obligations. Records must be kept for a period of at least seven years after the day the personal advice is provided to the client. What are

RG 179: Managed Discretionary Accounts and ASIC Corporations (Managed Discretionary Account Services) Instrument 2016/968 sets out how ASIC will regulate the provision of MDAs to retail clients. We have put together an overview of ASIC’s regulatory approach focusing on the MDA services typically provided by financial planners. It is important that you read these regulatory documents to understand how the new requirements and the relief may apply to the specific MDA services you offer your clients, and consider seeking legal advice. The following information is intended as a general guide only. The information is not intended to constitute professional or