Chapter 7 - Entering Fee Agreements
Consent To Renewal
Renewal can be done within the period starting 60 days before the Reference Date and ending 150 days after the Reference Date.
What Agreements Does This Apply To?
Consent To Renewal applies to:
OFA’s entered into on or after 10 January 2025.
OFA’s already in force on the start day, from the first anniversary of the arrangement that occurs after the start day.
What Is The Reference Date?
At the time an ongoing fee arrangement is first entered into or renewed, clients and fee recipients may agree on a day (known as the ‘reference day’) which is used to determine the timeframe in which fee recipients can obtain written consent to renew an ongoing fee arrangement from their clients.
For a reference day to have effect, it must be a day that is earlier than the anniversary of the day that the ongoing fee arrangement was entered into, and it must be disclosed to the client before they provide consent.
If a reference day is agreed on, its anniversary will be relied on to determine the timeframe in which a written consent can be signed going forward, unless the client and fee recipient subsequently agree on a different reference day.
What Is The Renewal Period?
The Fee Recipient obtains consent to renewing the OFA as follows.
Within the period starting 60 days before the Reference Date and ending 150 days after the Reference Date (see diagram below), the Fee Recipient:
provides to the client the OFA Disclosure and Consent Form;
obtains the signed OFA Disclosure and Consent Form back from the client; and
checks that the OFA Disclosure and Consent Form has been appropriately signed by the client and any other account holders
For Example:
If your client entered into an ongoing fee arrangement on the 1st March 2025, you can renew the agreement at any time between 31 December 2025 and 29 July 2026.
Do I Still Need To Complete The Product Renewal Consent?
Yes, where the fee is to be deducted from a platform account, both the licensee renewal and the platform renewal will need to be signed by the client.
This is because the platform consent to deduct will not include information about the services that the client will be entitled to receive under the ongoing fee arrangement during the upcoming period.
Cessation of Consent
There are different rules governing when consent ceases in relation to:
consent to entering into the OFA and the ongoing fees under the OFA; and
consent to deduct fees from an account
OFA consent For consent to entering into the OFA and the ongoing fees under the OFA, the first consent ceases 150 days after:
the anniversary of the day on which the OFA was entered into; or
the date specified in the OFA Disclosure and Consent Form, whichever is earlier. For the purposes of this policy, this is called the ‘Reference Date’.
Each subsequent OFA consent ceases 150 days after:
the anniversary of the last Reference Date; or
the date specified in the OFA Disclosure and Consent Form, whichever is earlier. This is also called the Reference Date, in this policy.
However, the Fee Recipient can trigger earlier cessation of consent by obtaining from the client new consent meeting the statutory requirements. This can only be done if the new consent is obtained within the period beginning 60 days prior to the Reference Date and ending 150 days after that date.
Resetting Reference Date
An OFA Disclosure and Consent Form may nominate a new Reference Date for the following year, provided that the new Reference Date is earlier than the previous Reference Date. The ‘Reference Date’ will initially be the anniversary of the date the OFA was entered into, unless a different date is selected by the Fee Recipient. From then on, it will be the anniversary of the previous Reference Date, unless a different date is selected by the Fee Recipient.
Provided the Fee Recipient obtains fee deduction consent in conjunction with obtaining OFA consent, then it will comply with the fee deduction consent timing requirements. These requirements require consent to be obtained before the expiry of 150 days after the anniversary of the day the OFA was entered into each year. Parliament’s expectation is that fee deduction consent will be renewed each year.
This effectively means that the Fee Recipient may harmonise the period in which OFA consent and fee deduction consent is due to be renewed for each OFA.