The Accounting Professional and Ethical Standards Board (APESB) has watered down its proposed APES 230 requirements following strong lobbying from the industry.
Originally, the new standards required a full ban on commissions and asset-based fees, above and beyond the requirements outlined for financial advisers under Future of Financial Advice reforms.
New APES 230 guidance obtained by InvestorDaily, to be voted on at an APESB meeting on Friday this week, contains a scaled back approach to third party payments for APESB members offering financial planning services operating on anything other than a fee-for-service basis.
According to the new guidance, members proceeding with third party remuneration will need to obtain prior written informed consent from clients and provide an annual disclosure to the client of the estimated amount of third party payments received.
They will need to disclose three comparative quotes, where available, for financial planning advice on new contracts for life insurance and other risk products and the procurement of new loans.
Where applicable, members must also disclose to the client the impact of any proposed changes to existing life insurance and other risk contracts and loans, the guidance stated.
The guidance says contracts entered into prior to 1 July 2014 will not be affected as long as the member doesn't provide further planning services on those contracts, suggesting any additional services on existing contracts may serve to cancel grandfathering allowances.
