Corporations Act 2001

CHAPTER 7 - FINANCIAL SERVICES AND MARKETS  

Note: This Chapter applies to a CCIV in a modified form: see Division 4 of Part 8B.7 .

PART 7.7A - BEST INTERESTS OBLIGATIONS AND REMUNERATION  

Division 3 - Charging ongoing fees to clients  

Subdivision A - Preliminary  

SECTION 962A   MEANING OF ONGOING FEE ARRANGEMENT  

Ongoing fee arrangements

962A(1)    
If:

(a)    a financial services licensee gives personal advice to a person as a retail client; and

(b)    that person enters into an arrangement with the financial services licensee, or a representative of the financial services licensee; and

(c)    under the terms of the arrangement, a fee (however described or structured) is to be paid during a period of more than 12 months;

the arrangement is an ongoing fee arrangement .

962A(2)    
If:

(a)    a representative of a financial services licensee gives personal advice to a person as a retail client; and

(b)    that person enters into an arrangement with the representative or the financial services licensee; and

(c)    under the terms of the arrangement, a fee (however described or structured) is to be paid during a period of more than 12 months;

the arrangement is an ongoing fee arrangement .

Paying for advice by instalments

962A(3)    
Despite subsections (1) and (2) , an arrangement is not an ongoing fee arrangement if each of the following is satisfied:

(a)    the total of the fees payable under the terms of the arrangement is fixed at the time the arrangement is entered into;

(b)    the total of the fees payable under the terms of the arrangement is specified in the arrangement;

(c)    the fees payable under the terms of the arrangement are to be paid by instalments over a fixed period specified in the arrangement;

(d)    the fees payable under the terms of the arrangement can reasonably be characterised as relating to personal advice given to the person before the arrangement is entered into;

(e)    under the terms of the arrangement, there is no fee payment of which, or the amount of which, is dependent on the amount invested by the person, or the amount in relation to which personal advice is given;

(f)    the person cannot opt out of payment of any of the fees payable under the terms of the arrangement.

Insurance premiums

962A(4)    
Despite subsections (1) and (2) , an arrangement is not an ongoing fee arrangement if the only fee payable under the arrangement is an insurance premium.

Other prescribed arrangements

962A(5)    
Despite subsections (1) and (2) , an arrangement is not an ongoing fee arrangement if it is an arrangement of a prescribed kind that relates to a fee that is prescribed as a product fee.