FAE · ASIC Financial Adviser Exam
Lesson 3 of 3 in Best interests duty and remuneration rules
How the 2024 reforms reshaped Division 3: what an ongoing fee arrangement is, what the annual consent must disclose and contain, how the reference day sets the renewal window, what happens when consent lapses, and the record, deduction and super fee consent rules.
Financial advice regulatory and legal obligations10 min read10 sections
Checked against: Corporations Act 2001 (Cth), compilation No. 149 (19 Sep 2026): ss962, 962A, 962B, 962C, 962F, 962G, 962H, 962J, 962R, 962S, 962T, 962U, 962V, 962WA, 962X, 962Y, 962YA, 962Z, 962ZA, 963B(1)(bb), 1101C(3), 1317GA, 1317GB, 1708-1708B, and endnotes (Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024, No. 67, 2024: Sch 1 items 8-92 commenced 10 July 2024); that Act as made, Sch 1 Part 2 items 8 and 10; Corporations Regulations 2001, compilation No. 214 (1 Sep 2026): reg 7.7A.11AA; ASIC INFO 286 FAQs: Ongoing fee arrangements and consents (updated June 2025); ASIC INFO 287 FAQs: Non-ongoing fee requests or consents (issued October 2024); ASIC INFO 256 FAQs: Ongoing fee arrangements (former regime, fetched 25 Oct 2026); ASIC DBFO package web page (checked 25 Oct 2026); Financial Planners and Advisers Code of Ethics 2019, Standard 1; ASIC Financial adviser exam: Exam preparation guidance v6.0 (September 2026).. Independent prep, not endorsed by ASIC.
This lesson serves the learning outcomes in ASIC's Exam preparation guidance v6.0 (September 2026) on applying Chapter 7 of the Corporations Act to scenarios to identify obligations and breaches, and on legal requirements for both the individual and the licensee. The reading list names Part 7.7A, INFO 286 (ongoing fee arrangements and consents) and INFO 287 (non-ongoing fee requests or consents).
ASIC supplies statutory extracts with questions, so the skill is applying them to dates. Scenarios ask you to decide whether an arrangement is an ongoing fee arrangement, whether a consent form is complete, whether a renewal fell inside its window, and what follows once the arrangement has ended. Our practice questions drill those calls.
An ongoing fee arrangement exists when a licensee or representative gives personal advice to a retail client and the client enters an arrangement under which a fee, however described, is payable during a period of more than 12 months (s962A(1), (2)). The fee recipient is whoever entered it, or the current holder of its rights (s962C).
| Not an ongoing fee arrangement | Conditions | Source |
|---|---|---|
| Paying for advice by instalments | Total fixed and specified up front, paid over a fixed period, for advice already given, not linked to amounts invested, no opt-out | s962A(3) |
| Insurance premium only | The only fee is a premium | s962A(4) |
| Prescribed product fee |
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Case study FAE-C36, question 1 of 5: Northshore's new client agreement. Northshore Advice Pty Ltd is an AFS licensee in Sydney's northern suburbs with five advisers and about 300 retail clients, most of them couples aged 55 to 75. Its practice manager, Lachlan Ward, is preparing the standard ongoing fee arrangement for new clients under the rules that have applied since 10 January 2025. The draft consent form says: 'This consent lasts until you tell us otherwise.' It sets the fee as '1% of your portfolio, deducted monthly from your platform account', with a worked example showing A$5,000 a year on a A$500,000 portfolio, and describes the services as 'ongoing support as required'. It includes a clause that clients who end the arrangement within two years must pay an exit fee of A$1,500. The form has a signature line for the client but no date line. Northshore plans to keep the signed forms only on its platform provider's system rather than its own, to save storage. Lachlan says the form is 'short and simple, which clients like', and he wants it in use from next month. Northshore's responsible manager, Dr Anita Rao, asks the compliance team to review the draft first. The compliance team starts with the opening line, 'This consent lasts until you tell us otherwise.' Dr Rao asks what is wrong with it. The BEST answer is that…
| An arrangement of a prescribed kind |
| s962A(5) |
| Fixed term of 12 months or less | ASIC looks at the written terms, whether fees really stop, and the client's understanding | INFO 286 Q2 |
The Delivering Better Financial Outcomes Act 2024 (No. 67, 2024) replaced the consent rules from 10 July 2024, with a delayed start day of 10 January 2025. Arrangements entered on or after that day follow the new rules; those already in force switched at their first anniversary day after it, with a modified consent window (ss1708-1708B).
Answer: A. a consent lapses 150 days after its reference day unless renewed, and the form must say so
Answer: A consent lapses 150 days after its reference day unless renewed, and the form must say so. Under s962H, a consent ceases to have effect 150 days after its reference day unless a new consent is given between 60 days before and 150 days after that day, so an open-ended statement misstates the law.Why not the others:• a consent lasts 12 months from signing, and a renewal…: a consent does not simply run 12 months from signing; the renewal period extends 150 days past the reference day.• the form must instead give the dates of…: annual renewal notices and fee disclosure statements were replaced by annual consent from 10 January 2025.• nothing is wrong: a client can withdraw…: a client can end the arrangement at any time (s962J), but the consent also expires by law.Rule: The reference day is the day the consent names or, if earlier, the anniversary of the day the arrangement was entered into, for a first consent (s962H(2)); before obtaining consent, the fee recipient must disclose in writing the maximum period until the consent will cease to have effect (s962G(2)(c)).Source: Corporations Act 2001 (Cth) ss962G, 962H, 962J (compilation No. 149, 19 Sep 2026)
Case study FAE-C171, question 3 of 7: The Leungs' lapsed fee arrangement. Talia Brooks is a relevant provider and authorised representative of Molonglo Advice Pty Ltd, a licensee in Canberra. Her clients Marcus Leung, 52, an IT project manager, and his wife Julie, 50, a physiotherapist, earn about A$260,000 a year between them and hold A$640,000 in a joint account on Bluegum Wrap, a platform. The Leungs entered an ongoing fee arrangement with Molonglo on 1 May 2025, signing a consent that named no reference day. Their fee of A$5,500 a year is deducted monthly from the joint platform account under a deduction consent that both of them signed. Molonglo emailed renewal forms in March and May 2026, but the Leungs, busy with Julie's father's illness, never returned them. Bluegum deducted the usual monthly fee on 5 October 2026. On 1 December 2025, on Talia's advice, Marcus took out a new retail life policy and Julie a new income protection policy, both outside super. Each insurer pays Molonglo an upfront commission of 60% of the first-year policy cost under terms that include clawback, and the Leungs gave informed consent before the policies were issued. On 1 May 2026 Julie's insurer cut her premium after agreeing that her risk had fallen because she had stopped smoking. On 1 October 2026 Marcus cancelled his life policy. Also in October 2026, Bluegum's parent company offers to buy Talia's client book. Its price would be 1% of client funds held on other platforms and 1.5% of client funds held on Bluegum. The Leungs now want Talia's ongoing service again, and Julie says they will 'just sign the old renewal form'. Before Molonglo charges them any ongoing fee, it MOST needs…
Answer: A. a new s962G consent after fresh written disclosure, and a new deduction consent signed by both
Answer: A new s962G consent after fresh written disclosure, and a new deduction consent signed by both. The old arrangement terminated when its consent ceased 150 days after the 1 May 2026 reference day, on 28 September 2026.Why not the others:• the old renewal form signed and dated…: the old form's disclosures describe a period and a termination date that no longer apply.• an email from Marcus confirming that both he…: an email from Marcus is neither a signed consent nor Julie's consent.• nothing new: the Leungs' October payment shows…: a payment after termination is not consent and does not create a new arrangement (s962F(2)).Rule: A new consent needs prior written disclosure of the s962G(2) matters, such as the services, the fees, the maximum period of the consent and the right to terminate at any time, then a consent that is signed, dated and held by the fee recipient. The deduction consent ceased with the arrangement (s962V(1)(b)); a new one must meet s962T, and each joint account holder must consent (s962S(4)).Source: Corporations Act 2001 (Cth) ss962F, 962G, 962H, 962S, 962T, 962V (compilation No. 149, 19 Sep 2026)
Case study FAE-C115, question 3 of 4: Prakash's ongoing fee from his platform. Prakash Nair is an authorised representative of Swanview Advice, a licensee in Perth. His clients pay ongoing advice fees that the platform deducts from their accounts under consents Swanview holds. One client, Helen Wong, 58, is a single former pharmacist with A$380,000 invested on the platform in a balanced portfolio. She entered her ongoing fee arrangement with Swanview, and gave her first consent, on 1 August 2025; the consent named no reference day. Her annual fee is A$3,300, deducted at A$275 a month, for an annual review and unlimited phone and email contact. In early 2026 Ms Wong moved overseas to care for her elderly mother, and she has not replied to two renewal requests that Swanview emailed in June and August 2026. It is now late January 2027, and she still has not replied. The platform continues to deduct the fee from her account each month, and no services have been provided since she left. Swanview's practice manager, Gary Stone, says, 'She's still a client, so keep charging until she tells us otherwise.' Prakash is unsure, and he checks Swanview's records of the consent and the renewal requests. Standard 1 requires you to 'act in accordance with all applicable laws, including this Code, and not try to avoid or circumvent their intent'. Gary now suggests that Prakash email Ms Wong a renewal form dated July 2026 for her to sign. If Prakash does so, under Standard 1 his conduct is BEST described as…
Answer: D. a breach: it tries to circumvent the consent rules
Answer: A breach: it tries to circumvent the consent rules. A form dated July 2026 would falsely show a timely renewal to cover fees charged after the arrangement ended.Working:1. Reference day: 1 August 2026, the arrangement's anniversary (s962H(2)).2. With no renewal, the consent ceased 150 days later, on 29 December 2026, and the arrangement terminated (ss962F, 962H).Why not the others:• compliant, if Ms Wong signs it knowing its true date…: Ms Wong's agreement does not make a false date true.• a breach of the fee rules only, which refunding…: refunding the later fees is needed, but it does not undo creating a false record, which also breaches Standard 8.• compliant, provided Prakash notes on file that…: a file note admitting the real date shows the form is false; it does not make using it lawful.Rule: Standard 1 requires acting in accordance with all applicable laws and not trying to avoid or circumvent their intent; a consent must be dated (s962G(1)(d)), and Standard 8 requires complete and accurate client records.Source: Financial Planners and Advisers Code of Ethics 2019 (F2019L00117), Standards 1 and 8; Corporations Act 2001 (Cth) ss962F, 962G, 962H (compilation No. 149, 19 Sep 2026)
Case study FAE-C09, question 2 of 5: Bayside Advice's fee renewals. Bayside Advice Pty Ltd is an AFS licensee in Brisbane with six advisers and 420 clients on ongoing fee arrangements. To simplify administration, its practice manager, Corinne Ladd, has recorded 1 July as every client's 'renewal date' in the client system, so that renewals happen together. The date is not written into any client's consent form. Kenji Ito, 71, and his wife, Mariko, 68, are retired teachers who own their home in Wynnum. They draw account-based pensions from a combined A$1.1m held on a platform and want a steady income with low volatility. They entered their ongoing fee arrangement with Bayside on 15 September 2025, signing a consent that named no reference day. Their annual fee is A$4,400, deducted from their platform account under a separate deduction consent. In August 2026 Bayside sends them a renewal form; they are overseas visiting their daughter and return it signed on 20 November 2026. Fees continued to be deducted from their platform account throughout. Separately, Bayside charges new clients a one-off A$2,200 fee for preparing an SOA. For clients who agree, the trustee of their super fund deducts the fee from their account. In October 2026 a new client, Dr Ruth Ambrose, 55, asks for Bayside's one-off A$2,200 SOA fee to be paid from her super. Before her fund's trustee can deduct the fee from her account, the law requires…
Answer: A. her written consent to the fee, with the prescribed details, held by the trustee
Answer: Her written consent to the fee, with the prescribed details, held by the trustee. A trustee may charge the cost of personal advice against a member's interest only under the member's written request or consent, and must have it or a copy (s99FA(1)(c), (f)).Why not the others:• an ongoing fee arrangement consent, renewed within 150 days…: the ongoing fee arrangement rules do not apply to a one-off fee.• nothing further: a fee paid by the client is not conflicted remuneration: being client-paid keeps the fee outside conflicted remuneration (s963A(1)(b)), but it does not remove the consent requirement.• a trustee statement confirming the advice relates to her interest in the fund: no trustee statement is required.Rule: For a fee that is not an ongoing fee, the consent must contain the details in s99FA(2), such as the member's and adviser's details, the fund, the services, the amount, her signature and the date.Source: Superannuation Industry (Supervision) Act 1993 (Cth) s99FA (compilation No. 131, 10 Aug 2026); Corporations Act 2001 (Cth) s963A (compilation No. 149, 19 Sep 2026)
