This document discusses fee disclosure statement delivery methods and answers frequently asked questions. It provides guidance on how to send fee disclosure statements depending on practice size, such as including them with annual reviews, batch emailing them monthly, or mailing them. It also answers common questions about when statements are due, acceptable delivery methods, handling client terminations, and determining anniversary dates. The document aims to help financial advisors understand and comply with fee disclosure obligations.

1. FoFA Conversation Series
Fee Disclosure Statement Delivery Method
& Frequently Asked Questions (FAQs)
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2. Fee Disclosure Statement Delivery Method and FAQs
In last week‟s communication we discussed the Infocus Fee Disclosure Statement Policy on disclosing
fees and commissions and we also provided you with a decision tree that illustrates which clients must
receive a FDS.
This week we will expand on the FDS and the delivery method as well as covering some Frequently
Asked Questions (FAQs).
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3. FDS Delivery Method
Depending on the size and composition of your practice, there are a number of
options you can consider when deciding how to send your FDS;
If you run a smaller practice and provide holistic advice to a number of fee-paying clients and see the
majority of your clients at least once a year, it may suit your business processes to provide Fee
Disclosure Statements to your clients as part of your annual review process. The delivery method
could include:
• Mail or email, send to the client inviting them to their annual review
• Given face to face during the review or
• Provided as part of your advice presentation documents
Consideration
As the FDS has specific deadlines, you will need to ensure where it is not possible to coordinate your
review within the 30 day “window” in which the FDS needs to be delivered, you have a process to
issue these FDS‟s to relevant clients.
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4. FDS Delivery Method
If you run a medium-sized practice and are set up to use the latest technology, have email details for
most of your clients (if not all your clients) and have consent to regularly communicate with your
clients by email, it may be easier to deliver your FDS by email.
You could consider „batching‟ them i.e. determine which FDS are due within the month (as per
previous guidance) and send these out at the beginning of the month. Where possible, it may be
preferable for you to include the FDS as part of your annual review process, so any questions or
concerns can be addressed face-to-face.
Consideration
You will likely need to set up an alternate process for distribution of FDS where you do not have a
client‟s email address or where the client has specifically asked not to be contacted electronically. For
instance, you may need to mail a physical copy of the FDS.
When communicating with clients, you may consider including marketing material with the FDS to
offer clients more information about your practice and the services you provide.
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5. FDS Delivery Method
Depending on the size and composition of your practice, there are a number of
options you can consider when deciding how to send your FDS;
If a significant portion of your clients do not take up the offer of an annual review and you don‟t have
an email address for your clients, you will need to send your FDS by post.
You can consider „batching‟ these i.e. determine which FDS are due within the month. You may prefer
to include the FDS distribution as part of your annual review process so any questions or concerns
can be addressed face-to-face.
Consideration
You may consider including marketing material with the FDS itself, to offer clients more information
about your practice and the services you provide.
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6. FDS Delivery Method
What do you need to know now?
Decide on the process you will use to send the FDS and set your business up to manage this.
This will include;
• Choosing a delivery method for your clients;
• Putting in place a second process for clients you might inadvertently miss. This option is more
relevant where you intend to deliver FDS face to face so that you can ensure you send them a
copy of their FDS within the required timeframe; Make sure you have the information you need in
Platformplus to make that delivery method successful;
• If you intend to send the FDS by email, do you have a valid email address for your clients? i.e. is
an email an appropriate form of communication having regard to your clients technological „know
how‟;
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7. FDS Delivery Method
What do you need to know now? (cont.)
Decide on the process you will use to send the FDS and set your business up to manage this.
This will include;
• If you intend to send by post, do you have a valid postal address and method to deal with „return
to sender‟ mail?;
• Consider the additional workload and allocate responsibility for this process to someone in your
office. Make sure you have budgeted to manage any additional cost (printing, postage, etc); and
• Consider whether you want to attach additional marketing material to the FDS, to further articulate
your value to clients.
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8. Frequently Asked Questions
Q: How will I know when to produce annual Fee Disclosure Statements
(FDS) for my clients?
A: Platformplus will have traffic lights for each client that will change colour as the
Anniversary Date approaches. You can also run a report that will tell you month-by-month
which clients are due to receive FDS notices.
Q: Does the FDS need to go out by mail?
A: No, the FDS can go out via mail or email (noting you need up-to-date client details).
Infocus will also be providing FDS via a secure login via the Client Portal of the Infocus
website.
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9. Frequently Asked Questions
Q: What happens if my client chooses to terminate my service part-way
through the year?
A: As soon as the agreement is terminated there is no ongoing service arrangement in place
at the FDS date, there is no obligation to provide a FDS. As for any refund of fees, this
depends on how the client is paying you.
If the client is paying up-front, you will need to refund the amount to be pro-rated to the
end of the term. If the client is paying you on an ongoing basis, the client fees will need to
be ceased at the end of the current billing cycle.
Q: I understand I need to do this for new clients, but what about existing?
A: The FDS obligation applies to ALL clients who have an ongoing fee arrangement in place.
You‟ll need to send a FDS to your client within 30 days of the fee disclosure day (the
anniversary of the date the Client Service Agreement was entered into).
Platformplus will have traffic lights that will warn you when this date is approaching.
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10. Frequently Asked Questions
Q: What happens if I don’t issue a FDS in accordance with the FoFA
legislation?
A: It is your responsibility to ensure that these notices are issued. If they are not, the client
will need to cease paying fees to you and Infocus will withhold any amounts received from
clients in a preservation account against future potential client claims. You may also be
subject to a civil penalty.
Q: What if I don’t know the Anniversary Date?
A: You need to make reasonable efforts to determine this date and our FDS Decision Tree
will set out the priority you can use to determine this date. However, if you cannot,
determine the anniversary date you could use the last scheduled review date as a proxy;
or alternatively you could default to 1 July 2013 as the anniversary date.
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11. Frequently Asked Questions
Q: Our office has developed customised workflows for use with
Platformplus. Will these be able to be customised workflows
for the FDS tasks?
A: No, FDS workflows are hardcoded to comply with obligations and improve system
integration. There are no plans at this stage to open this functionality.
Q: What will be disclosed in the FDS?
A: Where a client has an ongoing fee arrangement in place, the FDS should disclose all fees
and commissions for products and services delivered by you. It will should include the
services that were offered as part of the service arrangement and the services provided.
There will be provision for you to add text to help the client understand what they have
paid for where relevant.
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