Lesson 3 - Understanding the ‘Reference Date’ in Ongoing Fee Arrangements

What Is the Reference Date?

The Reference Date is simply the agreed next renewal date for new and existing ongoing service agreements entered or renewed on or after 10 January 2025. It marks the end of one 12-month service period and the start of the next.  

It is the point from which: 

• The 12-month service and fee period is measured. 

• The renewal consent window is calculated. 

• The fee-charging authority under the previous consent ends. 

Why the Reference Date Matters 

The reference date recurs every 12 months, and under the new framework, advisers and clients have flexibility to nominate the day that best aligns with the practice’s service cycle helping advisers manage renewals more efficiently or the client’s availability for a review each year.  

Incorrect reference dates can cause misaligned consent cycles, invalid fee deductions, and compliance breaches. 

💡Key points: 

• Advisers and clients can agree on a Reference Date at the start or renewal of the OFA. 

• This may be any date within the 12-month period following commencement of a new or renewed OFA.  

• It can be less than 12 months from commencement, provided all agreed ongoing services can in fact be delivered within that timeframe. 

• It must not be beyond 12 months. Any reference date beyond 12 months from commencement invalidates the OFA and triggers remediation. 

• Renewal window: 60 days before to 150 days after the Reference Date. 

• If no Reference Date is set, the default is the 12-month anniversary of the OFA start. 

• The DBFO reforms have abolished the requirement to issue a Fee Disclosure Statement (FDS) for any OFA entered or renewed on or after 10 January 2025. 

• As the Reference Date is the agreed next renewal date, setting today’s date as the Reference Date is erroneous. 

• If the reference date is incorrect: 

  • The consent expiry date becomes incorrect. 

  • The 12-month service period is misstated. 

  • Fee deductions may occur without valid authority—creating a reportable situation under ASIC’s breach reporting regime. 

  • If provided, the FDS becomes inaccurate or misleading.

ASIC’s Position on OFAs and Reference Dates

📝Information Sheet 286 (INFO 286) from ASIC covers the obligations financial advisers must meet regarding ongoing fee arrangements with retail clients under Schedule 1 of the Treasury Laws Amendment (Delivering Better Financial Outcomes and Other Measures) Act 2024.  

It answers 22 FAQs, including who must comply, what constitutes an ongoing fee arrangement, and key consent obligations—such as the requirement to obtain a client’s written consent before entering into or renewing an arrangement, the necessary disclosures (fee amount, frequency, recipient details, account number), and procedural requirements like electronic consent, expiry, withdrawal, and renewal timing.  

📢MUST READ:  FAQs: Ongoing fee arrangements and consents | ASIC 

Important Reminder: While the account number is not mandatory in an ongoing service agreement, the law provides that it must be disclosed in the written consent. As IIP adopts a single form that combines both the Service Agreement and the Fee Consent, we expect the account number to be provided in the fee consent section of the document. 

Typical Scenarios

Scenario 1: With Agreed Next Renewal Date (Reference Date) 

Client has an existing OFA covering 12 December 2024 to 11 December 2025. The adviser and client met for a review on 12 December 2025, and client signed the OFA Renewal. They set the Reference Date to 01 November of each year to align with the client’s best available time for review each year. 

💡Let us first dissect the existing agreement 

Current Anniversary: 12 December 2025 

Current Renewal Window: 13 October 2025* to 11 May 2026** 

Date Renewed: 12 December 2025 

*60 days before the current anniversary 

**150 days after the current anniversary 

👉Is the OFA renewed on time?  

✅Yes, the OFA is renewed within 150 days from the anniversary date. 

👉Can the adviser continue to deduct fees? 

✅Yes, as a written consent has been obtained within the renewal window, the adviser can continue to deduct fees from the client’s account. 

🔍For the next agreement 

Commencement Date: 12 December 2025 

Reference Date: 01 November 2026 
Renewal Window: 02 September 2026* to 31 March 2027** 

*60 days before the Reference Date 

**150 days after the Reference Date 

👉Is the Reference Date valid? 

✅Yes, it is within 12 months following the commencement date of the Renewal OFA 

NOTE: This is under the presumption that adviser can realistically deliver all agreed ongoing services for the 2025-2026 service period on or before 01 November 2026.

Scenario 2: No Nominated Reference Date 

Client has an existing OFA covering 12/12/2024 to 11/12/2025. The adviser and client met for a review and renewed the OFA without nominating an agreed next renewal date. 

🔍For the next agreement  

Current Anniversary: 12 December 2025 

Reference Date: 12 December 2026 (defaulting to the 12-month anniversary) 
Renewal Window: 13 October 2026* to 11 May 2027** 

*60 days before the Reference Date 

**150 days after the Reference Date 

👉Is the Reference Date valid? 

✅Yes, it is the default reference date that mirrors the original anniversary timing

Scenario 3: Reference Date Beyond 12 Months 

Client entered into a new Ongoing Fee Arrangement on 01 July 2025. Client wants Reference Date to be 01 September 2026. 

Commencement Date: 01 July 2025 

Reference Date: 01 September 2026 

👉Is the Reference Date valid? 

❌No, the intended Reference Date is 14 months from the OFA commencement date. You can explain the gap to the client and agree to move the Reference Date to be 01 July 2026 or ≤ 12 months (e.g. 15 June 2026). You cannot move a Reference Date if the change creates a gap longer than 12 months.

Scenario 4: Today’s Date as the Reference Date 

In the example below, the client is entering into an agreement on 06/06/2025 and nominate the same date as the Reference Date: 

❌This shows the incorrect structure:  

• Reference Date: 06/06/2025 (today) 

• Consent Expiry: 05/06/2026 (12 months from today) 

• Last possible date fees can be charged without renewed consent: 05/06/2026 (12 months from today) 

The reference date marks the boundary of two 12-month periods. It is not today’s date, as you cannot realistically deliver all agreed ongoing services for the 2025-2026 service period on the same day as the commencement date. 

✅This shows the correct structure:  

• Reference Date: 05/06/2026 (12 months from today) 

• Consent Expiry: 02/11/2026 (150 days from the reference date) 

• Last possible date fees can be charged without renewed consent: 05/06/2026 (150 days from the reference date)
  

Scenario 5: Moving the Reference Date Twice Within the Same Period 

✅First Move: At Renewal (ALLOWED) 

❌Second Move: Mid-cycle (NOT ALLOWED) 

Reference Dates can only be changed ONCE at renewal, not on-the-fly. Mid-cycle changes break the fee period and may trigger a new OFA. 

Practical Rule of Thumb for Advisers

When completing OFA documents: 

Ask yourself: 

“Is this the anniversary of the ongoing fee arrangement?” 

• If yes, this is your reference date. 

• If no, do not use today's date. 

Standard Workflow 

✅Nominate correct reference date (typically the current anniversary plus 12 months) 

✅Use combined consent form (OFA + fee deduction consent) 

✅Track consent window (-60 to +150 days) 

✅Align OFA, billing, and platform processes 

✅Keep records of all consents 

Compliance Risks of Incorrect Reference Dates 

Incorrect Reference Dates can lead to: 

• Charging fees without valid consent → reportable breach 

• Issuing an inaccurate FDS (optional) → misleading disclosure 

• Misalignment between billing cycles and consent periods 

• Client complaints and remediation obligations 

• Increased audit findings 

Accurate reference dates are a critical part of ASIC’s fee-for-service reforms, and the licensee must be able to evidence full compliance.

Q and As 

❓Question 1: What happens if the OFA renewal is signed by the client after 150 days from the Reference Date? 

💡Answer: The OFA is invalid and triggers remediation which includes refunding the clients for the fees charged during the period without a valid OFA and issuance of a new OFA (if client wishes to restart). 

❓Question 2: What do I need to do if the client does not provide consent after 150 days from the Reference Date? 

💡Answer: Fees need to be turned off immediately. By law, you have 10 business days to notify the client and the product/provider to switch off ongoing advice fees. 

❓Question 3: What happens if the client informed that they will no longer be renewing the OFA, but it is still within the 150-day renewal window? 

💡Answer: The law provides that a client can end an OFA at any time, in writing. Regardless of whether it is within 150 days from the Reference Date, you must notify account providers within 10 business days of the client communication and cease arranging fee deductions unless new written consent has been obtained. 

❓Question 4: What if I continued receiving ongoing fees after the consent ceased? 

💡Answer: If you receive ongoing fees after a client’s consent has ceased or expired, you must refund the amount to the client’s account within 10 business days. Failure to do so gives the client the right to seek a court-ordered refund. 

❓Question 5: Can I change the Reference Date? 

💡Answer: Yes, advisers are allowed to align reference dates with preferred review cycles – provided the client agrees and the change is properly documented in a signed written consent at the time of renewal. You cannot deliberately reset the Reference Dates outside of a consent/renewal process. 

Final Takeaway 

Proper Reference Date management is essential to keeping OFAs valid. Treat the reference date as a strategic anchor as it is designed to give advisers and clients operational efficiency, so that renewals are not tied only to hard anniversaries (which can fall at inconvenient times). Hence, it is important to get this right. Treating it as simply “today’s date” creates immediate errors and potential regulatory breaches. 

If you have questions about setting reference dates—or if you want your OFA processes reviewed—please contact the IIP Compliance Team at support@iip.net.au.