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Ahead of reforms that seek to address failures in the retail advice market, the Australian Securities and Investments Commission (ASIC) is adopting new guidance for ongoing fee arrangements.

On July 1, advisors in Australia will face two new requirements that were introduced in response to a Royal Commission’s findings that investors suffered harm — such as getting poor advice and being charged for advice they never received — under the existing regime.

Starting next month, advisors will be required to obtain written consent from clients under ongoing fee arrangements, and they must renew these arrangements annually.

On Tuesday, the ASIC published new guidance that aims to provide advisors and their firms with greater clarity about their obligations when providing advice to retail clients under ongoing fee-based arrangements. The regulator said that the industry sought shorter, simpler and more user-friendly regulatory guidance in this area.

The guidance sets out the regulator’s expectations under the new rules, including when consent is required, how it can be obtained and record-keeping obligations for consent forms.

While the guidance doesn’t prescribe the content of required fee disclosures, it indicates that disclosures “should be consumer-friendly, concise and easy to read.”

ASIC has also published rule changes that reflect new obligations that were adopted in response to the Royal Commission’s findings, including a requirement to disclose a lack of independence.