Review

Chapter 10

Purpose of Reviews

The purpose of each review is to make sure that the strategy and products recommended are still helping the client meet their needs goals and objectives, and track the progress they have made towards meeting these. 

Frequency of Reviews

Investment Strategies Every Year
Insurance Strategies Every 2 Years
Gearing Strategies Every 6 Months
Estate Planning Strategies Every 2 Years

Authority to Proceed with a Review

Before you begin a review you should:

  • clearly explain to the client what the differences are between a review of a current strategy and the provision of a full advice
  • give your client the opportunity to review the original Client Agreement,
  • discuss the cost of the review, and
  • obtain written authority from your client to proceed.

What Should be Reviewed

When conducting a review you must:

  • Compare the client’s current financial position to their financial position when the advice was originally provided.  This will enable you to see if the strategy that was recommended has made a materially positive difference for your client
  • Compare the client’s financial position against their needs, goals and objectives as agreed in the SoA
  • Confirm whether any goals that should have been met by the time of the review have been met.  And if they have not, why not?
  • Confirm with the client whether there has been a change to their 
  1. Circumstances
  2. needs, goals and objectives, or
  3. any relevant timeframes.
  • Assess whether the recommended strategy should be:
  1. Continued as is,
  2. Continued with changes, or
  3. Discontinued.

Presenting the Outcome of the Review

Once you have completed the review, you must present the results of the review to your client in writing.

You should include in your presentation:

  • Any material change to the client’s circumstances
  • Any change to the client’s needs, goals, objectives or timeframes.  It might be useful to present a new timeline
  • Whether the previously recommended strategy should be: 
  1. Continued as is,
  2.  Continued with changes, or
  3. Discontinued. 
  • If the recommended strategy is to be continued with changes, what those changes are. 

If there are material changes to the client’s circumstances, a significant change to their needs goals or objectives or the recommended strategy will not allow the client to meet these in the timeframe they require, you should recommend that the client undertake a new advice cycle. 

Fee Disclosure

An annual Fee Disclosure Statement (FDS) must be given to existing and new retail clients who have entered into an ongoing fee arrangement for more than 12 months (See FDS section of the Our Obligation E Book for details and conditions) 

Disclosure day for new clients

If you are charging an ongoing fee you must provide a Fee Disclosure Statement to the client on or before the anniversary of the day on which the arrangement was agreed too. This is called the disclosure day.

For all subsequent FDSs, the disclosure day is the anniversary of the day immediately after the end of the 12-month period that the previous FDS covered

The FDS must be provided in writing and clearly show the client:

  • the amount of fees paid by the client in dollar amounts;
  • the service the client was entitled to receive; and
  • the services they actually received over the last 12 months.

Opt In

If you have entered into ongoing fee arrangements for a period of 12 months or more with new retail clients from 1 July 2013 you must renew your client’s agreement to pay your ongoing advice fees every two years.

New Clients Who Have Previously Renewed:

If you are charging an ongoing fee you must provide a renewal notice to the clients within 60 days of the second anniversary of the last day on which the arrangement was previously renewed.

Renewal Notice Day

The renewal notice may be given to the client earlier than the anniversary day if it is convenient to do so, such as during a client review.

FDS to be Given with Renewal Notice

A Fee Disclosure Statement must be provided to all new clients with the renewal notices. Click on the link at the end of this Chapter to see AFFINIA’s FDS and OPT In guidelines and templates

Renewal Notice

The renewal notice must include information that:

  • The client may renew the service arrangement with the Representative by replying in writing within 30 days of the renewal notice.
  • The client’s arrangement with the Representative will stop and no further advice will be provided or fee charged, if the client does not renew the arrangement in writing.
  • You must by law assume the client has elected not to renew the arrangement with you if the client does not provide a written acceptance of the renewal notice within 30 days of the renewal notice being given to the client.

For all other detailed FDS and OPT in guidelines please click on the link below or refer to the Affinia Our Obligations E Book.

Affinia's Monitoring and Supervision Framework

This framework has been designed to assist Affinia to effectively manage its monitoring and supervision obligations and managing any breaches detected.

Affinia is required to monitor and supervise the activities of representatives who act on its behalf. This responsibility extends to the activities of Responsible Managers, employees and non-employee representatives and staff whose roles are not advice providing, but who engage in activities that involve licence-related functions.

The Monitoring Program provides details about how Affinia will monitor, supervise, report on and manage its representatives and their business practices. This policy also includes copies of the relevant check list used by the professional standards team for file and annual reviews.

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