Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024 (67 of 2024)

Schedule 1   Delivering better financial outcomes - reducing red tape

Part 2   Ongoing fee arrangements

Corporations Act 2001

10   Subdivision B of Division 3 of Part 7.7A

Repeal the Subdivision, substitute:

Subdivision B - Client consent required for ongoing fee arrangements

962F Ongoing fee arrangement terminates without consent

(1) It is a condition of an ongoing fee arrangement that the arrangement terminates if:

(a) the client has not given a written consent in relation to the arrangement that complies with the requirements in section 962G; or

(b) all of the following apply:

(i) the client has given a written consent in relation to the arrangement that complies with the requirements in section 962G;

(ii) that consent has ceased to have effect under section 962H;

(iii) the client has not given a new consent that meets the requirements in section 962G in relation to the arrangement in the period specified in paragraph 962H(1)(b).

(2) The client is not taken to have waived the client's rights under the condition in subsection (1) (subject to subsection (3)), or to have entered into a new ongoing fee arrangement, if the client makes a payment of an ongoing fee after the arrangement terminates under subsection (1).

(3) However, if the client makes a payment of an ongoing fee after the arrangement terminates under subsection (1), the fee recipient is not obliged to refund the payment.

Note: A Court may order that the fee recipient refund the amount (see section 1317GA).

962G Requirements for consent

(1) A written consent given in relation to an ongoing fee arrangement complies with the requirements in this section if:

(a) before obtaining the consent, the fee recipient disclosed to the client, in writing, the matters set out in subsection (2); and

(b) the consent is for:

(i) the ongoing fee arrangement to be entered into, or renewed (as the case requires); and

(ii) the ongoing fees disclosed as required under paragraph (2)(e) to be charged to the client; and

(c) the consent is signed by the client; and

(d) the consent is dated; and

(e) the fee recipient has the consent or a copy of the consent.

(2) The matters that must be disclosed are as follows:

(a) the name and contact details of the person who is the fee recipient under the ongoing fee arrangement;

(b) an explanation of why the fee recipient is seeking the consent;

(c) the maximum period until the consent will cease to have effect under section 962H;

(d) information about the services that the client will be entitled to receive under the arrangement during that period;

(e) for each ongoing fee that the client will be required to pay under the arrangement during that period:

(i) the amount of the fee; or

(ii) if the amount of the fee cannot be determined at the time of disclosure, a reasonable estimate of the amount of the ongoing fee and an explanation of the method used to work out the estimate;

(f) the frequency of the ongoing fees during that period;

(g) a statement that the ongoing fee arrangement can be terminated by the client at any time;

(h) a statement that the arrangement will terminate, and no further advice will be provided or fee charged under it, if the consent is not given;

(i) the date on which the arrangement will terminate if the consent is not given;

(j) information about any other matters prescribed by the regulations.

962H When consent ceases to have effect

(1) A consent given in relation to an ongoing fee arrangement for the purposes of this Subdivision ceases to have effect:

(a) unless paragraph (b) applies - at the end of the period of 150 days after the day determined under subsection (2); or

(b) if a new consent that complies with the requirements in section 962G is given in relation to the arrangement in the period that starts 60 days before the day determined under subsection (2) and ends 150 days after that day - at the time that new consent is given.

Reference date for determining renewal period and cessation of consent

(2) The day determined under this subsection for a consent (the current consent ) given in relation to an ongoing fee arrangement is the earlier of:

(a) if the current consent specifies a day - that day; and

(b) the anniversary of:

(i) if the current consent is the first consent given in relation to the arrangement - the day on which the ongoing fee arrangement was entered into; or

(ii) if the current consent is not the first consent given in relation to the arrangement - the day determined under this subsection for the previous consent.

962J Client may terminate ongoing fee arrangement at any time

(1) It is a condition of the ongoing fee arrangement that the client may terminate the arrangement at any time.

(2) A client may terminate the ongoing fee arrangement by giving notice to the fee recipient in relation to the ongoing fee arrangement, in writing, that the client wishes to terminate the arrangement.

(3) If the client gives a notice under subsection (2) to terminate the ongoing fee arrangement, the arrangement terminates on the day on which the notice is given.

(4) Any condition of the ongoing fee arrangement, or any other arrangement, that requires the client to pay an amount on terminating the ongoing fee arrangement is void to the extent that the amount exceeds the sum of:

(a) any liability that the client has accrued but not satisfied under the ongoing fee arrangement before the termination; and

(b) the costs of the current fee recipient incurred solely and directly because of the termination.