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Advice fee request FAQs

These FAQs are related to the Super Savings product offering as related to the Australian Retirement Trust Adviser Registration Terms and Conditions.

Members can request that an advice fee (Initial/One-Off and/or Monthly) is paid to their financial adviser for superannuation advice services that meet the sole purpose test requirements of the Superannuation Industry (Supervision) Act 1993.

This is available for members who receive personal advice from financial advisers that are registered with Australian Retirement Trust.

Payment of an advice fee from a member’s account is at Australian Retirement Trust’s discretion. These FAQs set out some of the principles where Australian Retirement Trust may exercise the discretion to pay an advice fee from a member’s account.

Payment of advice fees is subject to the Adviser Registration Terms and Conditions - which only permits for payment of an advice fee when the member holds an account in the Super Savings product offering.

Contents

Who receives the payment?

Advice fees are paid to the Fee Recipient, which is the financial adviser’s AFS Licensee (the entity which holds the AFSL, hereafter referred to as the 'AFS Licensee'). The Australian Retirement Trust will provide the AFS Licensee with a Recipient Created Tax Invoice (RCTI) for the GST inclusive amount of the advice fee. 

If the AFS Licensee does not hold an ABN, at Australian Retirement Trust’s discretion the advice fee may be paid to a related entity (i.e. a Trust owned by the AFS Licensee) if Australian Retirement Trust has been adequately directed by the AFS Licensee.

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When are advice fees paid?

Advice fees for financial advisers are paid to the AFS Licensee on the 16th of the month, or as soon as possible thereafter.

Initial/One-off advice fees may be paid separately prior to the 16th of the month, when the appropriate instruction is provided on the Advice fee request form.

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How Australian Retirement Trust pays an advice fee?

The Australian Retirement Trust pays the advice fee agreed by a member, as set out in an Advice fee request, by debiting the GST inclusive amount from the member’s account.

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Will the member receive any tax benefits for the advice fee paid?

Members have the ability to make pre-tax contributions to their account to pay for their advice fees which may provide a tax benefit for the members.

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Tax Reimbursements

We do not currently reimburse any tax when an advice fee is paid from a member account held in the Super Savings product offering, including Reduced Input Tax Credits.

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What advice services can be paid for?

The advice services provided must have a direct, reasonable, and transparent connection to the member’s interest in the Australian Retirement Trust.

The Australian Retirement Trust Trustees have agreed that the following advice strategies fall within the Sole Purpose Test:

  • Australian Retirement Trust contributions (including as a result of cash flow analysis to determine ability to contribute);
  • Australian Retirement Trust investment strategy;
  • Super consolidation to Australian Retirement Trust;
  • Australian Retirement Trust transition to retirement;
  • Australian Retirement Trust pension account establishment and income payments;
  • Retirement planning as it relates to Australian Retirement Trust accounts;
  • Recommendation to rollout from Australian Retirement Trust;
  • Estate planning to the extent of beneficiary nomination (binding death benefit nomination or reversionary pension nomination) within Australian Retirement Trust accumulation and pension accounts;
  • Centrelink planning in relation to Australian Retirement Trust accounts;
  • Insurance held within Australian Retirement Trust; and
  • Current and future fund benefits as they relate to disability or terminal illness claims and the resultant future income needs of the member.

This is not an exhaustive list, but rather provides guidance around Australian Retirement Trust's obligations under the sole purpose test.

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What advice services must be charged externally?

Where advice services do not have a direct, reasonable, and transparent connection to the member's interest in the Australian Retirement Trust Superannuation Fund, these advice services must be charged externally of the member's Australian Retirement Trust account (i.e. by invoice or from the other product provider).

The following advice strategies must not be charged to a member's Australian Retirement Trust account:

  • Any product or financial advice that is not related to the member’s Australian Retirement Trust Superannuation Fund account;
  • Withdrawing funds from the member/s account for a non-superannuation purpose (pre-retirement); 
  • Wealth creation;
  • Gearing;
  • Investment strategies outside super;
  • External insurance advice, paid for by the Australian Retirement Trust member via personal cashflow or rollover from Australian Retirement Trust.
  • Estate planning (except nomination of beneficiary within Australian Retirement Trust);
  • Cash flow management applied to budgeting, debt management and other forms of non-super savings;
  • Super contributions to a Fund that is not Australian Retirement Trust;
  • Choice of fund for any Superannuation Fund that is not the member’s Australian Retirement Trust Superannuation account;
  • Debt management;
  • Self-Managed Super Funds;
  • Salary packaging (except salary sacrifice to Australian Retirement Trust); and
  • Transactional assistance where a personal advice document is not provided.

This is not an exhaustive list, but rather provides guidance around Australian Retirement Trust’s obligations under the sole purpose test.

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Apportionment of advice fees

Sole Purpose Test vs Non-Sole Purpose Test

Advice fees are required to be apportioned between advice services that can and cannot be paid in accordance with the Sole Purpose Test (guidance provided above). The amount of the advice fee for which payment is claimed from Australian Retirement Trust must be reasonable and the financial adviser must be able to support the apportionment if Australian Retirement Trust request further information.

Between a member's Australian Retirement Trust accounts

Australian Retirement Trust is single fund that holds both Accumulation and Income accounts, and it is held by one Trustee. As a result, the advice fee request does not need to be apportioned between a member’s Accumulation and Income accounts (where advice has been provided across both accounts).

Between dependent spouses

Where a member and their dependent spouse (who are both members of Australian Retirement Trust) receive advice within the same advice document (and this advice meets Australian Retirement Trust’s Sole Purpose Test obligations) the cost of the advice may be charged solely to one member. However, the advice fee charged must still adhere to Australian Retirement Trust’s advice fee caps as they apply to that individual member. 

As the Australian Retirement Trust is held by one Trustee, our Trustees are comfortable that apportioning the advice fee in this manner still meets their Sole Purpose Test obligations and also maintains their Member’s Best Interest duty under the SIS Act (the collective best interest of all members of the fund).

Between a member's different products

As the Australian Retirement Trust Superannuation Fund is held by one Trustee, our Trustees are comfortable that apportioning the advice fee in the manner still meets their Sole Purpose Test obligations and also maintains their Member’s Best Interest duty under the SIS Act (the collective best interest of all members of the fund).

Between a member's account in the Australian Retirement Trust and one or more external funds

If a member holds superannuation in both Australian Retirement Trust and an additional fund external to Australian Retirement Trust and advice is provided about both these funds, the fees charged will need to be apportioned between these various funds, ensuring that only advice relating to Australian Retirement Trust is deducted from the fund.

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Monthly advice fee and our MySuper Product

Australian Retirement Trust do not permit the payment of a Monthly advice fee or a fee associated with an ongoing fee arrangement from our MySuper product.

The MySuper product available to members who have an account in the Super Savings product offering is the ‘Lifecycle investment strategy’. This means if the member has any portion of their portfolio invested in the Lifecycle investment strategy, Australian Retirement Trust will be unable to process the payment of a monthly advice fee or a fee associated with an ongoing fee arrangement.

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Personal advice vs general advice

It is the legal obligation of the financial adviser and their AFS Licensee to ensure personal advice services have been provided for the advice fee charged.

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Australian Retirement Trust advice fee discretion

Australian Retirement Trust reserves the right to decline payment of an advice fee, including discontinuing further payments of Monthly advice fees for any reason and without giving any reason. Australian Retirement Trust also reserves the right to obtain a refund of advice fees deducted from a member account where the advice does not meet Australian Retirement Trust’s Advice Fee Policy or Sole Purpose Test obligations.

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Conditions and rules of advice fee payments

An Advice fee request applies only to the member identified in the form. Where a new Advice fee request is submitted for any member and is accepted by Australian Retirement Trust, any Advice fee request previously submitted for that member is superseded and replaced.

An advice fee request cannot be paid under an Advice fee request where a member’s account holds a defined benefit or defined benefit pension product.

If payment of an advice fee would result in a members’ account balance falling below $6,000, advice fees will continue to be paid if the member holds another account in the Super Savings product offering with sufficient balance under the same member number. Please note that if the member holds another account in the Super Savings product offering under a different member number, Australian Retirement Trust will require a new Advice fee request form to pay the advice fee from the additional account. 

Australian Retirement Trust will not process and as a result, will terminate an advice fee where the payment of the advice fee will reduce the member’s total account balance in any one account below $6,000. 

The following conditions need to be met immediately prior to the payment of any advice fee:

  • The Advice fee requested must not exceed the caps noted within this document and/or published on the Australian Retirement Trust website, and as amended from time to time.
  • All required details in the Advice fee request form are completed.
  • The financial adviser is registered with Australian Retirement Trust.
  • The financial adviser holds a valid third party authority for the relevant member.
  • Australian Retirement Trust has a completed AFS Licensee Agreement in place with the financial adviser’s AFS Licensee.
  • The financial adviser is listed as an active financial adviser on ASIC’s financial adviser register, and is a current authorised representative in respect of the AFS Licensee specified on the Advice fee request form.
  • An advice document has been provided to the Australian Retirement Trust member prior to submitting the advice fee request.
  • The principal/servicing adviser listed on the Advice fee request form must be the same as the servicing adviser listed on the Statement of Advice provided to the member.
  • Australian Retirement Trust has confirmed the validity of any details provided that are verifiable from Australian Retirement Trust’s records and ASIC records.
  • Australian Retirement Trust may require further details to confirm correct apportionment of the fee for the advice services provided. We will notify the financial adviser for more information if this is the case.
  • Australian Retirement Trust may request, and be provided a copy of the member's advice documents in relation to the advice fee request at any time. For clarity, this may be prior to payment, throughout the course of payment (i.e. monthly advice fee) or after the payment of an advice fee.

Advice fees and deceased members:

Australian Retirement Trust views the death of a member during the duration of an advice fee agreement as a cessation of that agreement. Australian Retirement Trust then will terminate any advice fees following the notification of the death of a member. Where advice fees are paid after the date of death, but prior to the date of notification, an advice fee refund from the AFS Licensee will be required. In the event that advice fees have been paid for future services to be provided, Australian Retirement Trust again will seek a refund from the AFS Licensee for the proportion of advice which had not been provided prior to the members death.

Initial/Once-off Advice Fee:

  • Member must sign form and then adviser is required to submit the form within 90 days of the member signed date.

Monthly Advice Fee (Fixed Term Advice Arrangement / Ongoing Fee Arrangement):

  • Adviser selects the start date of the agreement on the Advice fee request form (the date can be 30 days into the future or past from the date they create the Advice fee request form);
  • Member must sign the form within 30 days of the start date outlined on the Advice fee request form; and
  • Adviser must then submit the Advice fee request form within 90 days of the date the member signed the Advice fee request form.

 

Monthly fee – example 1: Back dating

Fee form generation date:

15/07/2021

Selected start date:

01/07/2021

Member must sign by:

30/07/2021

Submission date if member signed on 30/07/2021

28/10/2021

 

Please note: in the above scenario, the member has 15 days to sign the form (this ensures consent is provided within 30 days of the start date).

 

Monthly fee – example 2: Back dating

Fee form generation date:

30/07/2021

Selected start date:

01/07/2021

Member must sign by:

30/07/2021

Submission date if member signed on 30/07/2021

28/10/2021

 

Please note: in the above scenario, the member must sign the form on the same day (this ensures consent is provided within 30 days of the start date).

 

Monthly fee – example 3: Forward dating

Fee form generation date:

02/07/2021

Selected start date:

01/08/2021

Member must sign by:

30/08/2021

Submission date if member signed on 30/08/2021

26/11/2021

 

Please note: in the above scenario, by forward dating in the above scenario the member has 60 days to sign the form (this ensures consent is provided within 30 days of the start date).

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Change of AFS Licensee

Australian Retirement Trust will pay advice fees (Initial/One-Off and/or Monthly) to the AFS Licensee named on the Advice fee request forms, until we become aware that the financial adviser has changed AFS Licensee.

On becoming aware that the financial adviser has changed AFS Licensee, Australian Retirement Trust will not pay any further amounts until we also receive notice from the appropriate AFS Licensee that the member is still receiving advice services.

Australian Retirement Trust must receive this notice in a written document (in the form required by Australian Retirement Trust) signed by the AFS Licensee confirming the variation of AFS Licensee (Fee Recipient).

Refer to "Suspension or cancellation of the Services" in the Adviser Registration Terms and Conditions for more information.

For further information regarding Client Transfers visit our Client Transfer FAQs.

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Available advice fees types and definitions

Available advice fee types:

From 1 July 2021, the following advice fees are available: 

  • Initial/One-off advice fee; 
  • Monthly advice fee (one of the below options must be selected): 
    • Fixed term advice fee arrangement; or 
    • Ongoing advice fee arrangement.

Definitions / Purpose:

Initial/One-off advice fee:

  • A lump sum advice fee charged for point in time advice. This advice must be contained within a Statement of Advice or Record of Advice and may include the associated costs for implementation (where outlined within the same Statement of Advice or Record of Advice). 

Monthly advice fees:

  • Monthly advice fee arrangements:
    • Fixed term advice fee arrangements have a maximum duration of 365 days. 
    • Ongoing advice fee arrangements align and adhere to the requirements of an ‘Ongoing Fee Arrangement’ as defined by the Corporations Act 2001 (Cth).  

Both Fixed term advice fee and Ongoing advice fee arrangements are paid monthly for prospective advice services, resulting in the review of advice strategies provided in the prior SoA.

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Monthly advice fee arrangements

Australian Retirement Trust’s Advice fee request form includes both a monthly advice fee start and paid until date. These changes have been made to assist financial advisers and members to align their client agreements with their Australian Retirement Trust advice fees. Our Advice fee request form provides more detail around how these payments are made. 

Important Information – Monthly advice fees (General): 

  • The monthly advice fee start date cannot be more than 30 days prior/post the date your client signs our Advice fee request form.
  • The term of agreement entered into on our Advice fee request form cannot be more than 365 days; however
    • When selecting an Ongoing advice fee arrangement, a member may renew their consent within the required period to continue the fee arrangement.
  • When charging a monthly advice fee, the financial adviser must detail the services being provided to the member as outlined in the Services Agreement, on our Advice Fee Request form.
  • Australian Retirement Trust’s Advice fee request form must be submitted through Adviser Online within 90 days of your client signing the form.

Important Information - Ongoing advice fee arrangements: 

  • Ongoing monthly advice fees will stop being paid at the anniversary date.
  • If Australian Retirement Trust receives a renewal, that has been signed within the required period after the anniversary date, Australian Retirement Trust will backpay (in one lump sum payment) any payments for that period.
  • If Australian Retirement Trust do not receive a renewal, nothing further will be required from either the financial adviser or the member as the advice fee payments will have ceased at the anniversary date.

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Advice fee caps (Initial/One-off and Monthly advice fees)

Initial/One-off advice fees:

  • If the member’s balance is below $20,000, Australian Retirement Trust will not automatically authorise the payment without a pre-payment review being completed.
  • Initial/one-off advice fees will be restricted by only being payable once every three years, unless a pre-payment review determines there has been a material change in the member’s circumstances.
  • The upper cap for automatic approval of an initial/one-off advice fee is the lower of $6,600 or 2.2% (incl. GST) of the member’s current balance. 

Please note: There are no exceptions to the above listed Initial/One-off advice fee (dollar or percentage based caps).

Monthly advice fees:

  • Australian Retirement Trust will not pay monthly advice fees for members with a balance below $50,000.
  • The upper cap for monthly advice fees is the lower of $6,600 p.a. or 1.1% p.a. (incl. GST) of the member’s current balance.
  • The monthly advice fee cap is calculated in the following manner:
    • Monthly fee value x 12 instalments to provide a p.a. percentage which cannot exceed 1.1% (incl. GST) of the member’s current balance at the date the fee is processed.
    • The maximum permittable monthly fee is $550 per month ($6,600 p.a.)
    • The advice fee cap is applied in this manner regardless of the duration outlined on the Advice fee request form.

Please note: There are no exceptions to the above listed Monthly advice fee caps

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Advice fee pre-payment reviews

A review of the advice document associated with the advice fee is required prior to payment in the following circumstances:

  • Where a member’s balance is below $20,000. 
  • A second initial/one-off fee within a rolling three-year period. 

Advisers will be required to provide a copy of the client’s Statement of Advice with the fee application. This is to ensure Australian Retirement Trust continues to meet its Trustee obligations including the application of the Sole Purpose Test. 

Second initial/one-off advice fee - Guidance

Approval of a second initial/one-off fee within a rolling three year period, will be subject to the member experiencing a material change in their circumstances.

A material change in the member’s circumstances may include, but is not limited to the following:

  • Retirement;
  • Divorce;
  • Redundancy;
  • Death of a spouse; or
  • Substantial inheritance.

If a member has a second initial/one-off fee request in a three-year period but with a different financial adviser to the previous initial/one-off advice fee, the material change rule is still applicable.

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Australian Retirement Trust advice fee reviews

Australian Retirement Trust conducts periodic reviews of process advice fee requests. From time to time, we will require copies of advice documents (i.e. Statement of Advice) and/or other advice related documents (i.e. Ongoing Service Agreements/Client Service Agreements) for review.

Australian Retirement Trust review the requested advice documents to ensure that where an advice fee is charged to an Australian Retirement Trust member’s account, it adheres to Australian Retirement Trust’s Sole Purpose Test obligations and Advice Fee Policy. 

In the event Australian Retirement Trust is not provided a copy of the requested advice document/s, Australian Retirement Trust may be required to request a refund of any advice fee payments that have been made.

Refer to “Advice Fee Policy” in the Adviser Registration Terms and Conditions for more information.

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Further Questions

If you have further advice fee enquiries that are not answered by the above FAQ's, please contact us at Advice_Operations@australianretirementtrust.com.au.

 

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