What is an ongoing fee arrangement?
An ongoing fee arrangement (OFA) is any arrangement where a retail client is charged an ongoing fee for financial advice over a period of more than 12 months. The fee does not need to be described as an ongoing fee - what matters is whether the client is being charged periodically, over time, for advice services. This is regulated under Part 7.7A of the Corporations Act 2001.
OFAs are common in ongoing advice relationships where a client pays a monthly, quarterly, or annual fee to receive regular reviews, portfolio monitoring, or access to advice as needed. They are distinct from one-off advice fees tied to a single Statement of Advice.
If you charge an ongoing fee to a retail client, the OFA framework applies to you. That includes obligations to give a Fee Disclosure Statement (FDS) and to obtain the client's written consent to continue the arrangement, at least once a year.
What is a Fee Disclosure Statement?
A Fee Disclosure Statement is a written document that gives the client a clear picture of what fees they have paid and what services they received, and what they can expect in the year ahead. The FDS has two parts: a backward look at the past 12 months, and a forward look at the coming 12 months.
- Fees paid: the total fees charged to the client in the previous 12-month period under the OFA.
- Services provided: the services the client actually received in that period.
- Fees to be charged: the fees the client will be charged in the next 12 months.
- Services to be provided: the services the client will be entitled to receive in the next 12 months.
The FDS must be given to the client before or at the same time as seeking their annual consent. The timing and exact form requirements have been subject to reform - check current ASIC guidance and your licensee's template.
The annual consent requirement
Since reforms that took effect from 1 July 2021, advisers must obtain the client's written consent to renew an ongoing fee arrangement at least once a year. Without valid consent, the adviser generally cannot continue to charge the ongoing fee.
The consent must be informed - the client needs to have received their FDS before they can meaningfully agree to the arrangement continuing. A consent form that is signed without the client understanding what they are agreeing to is not strong evidence that the requirement was met.
The DBFO reforms have been streamlining these consent and disclosure requirements. Some of the previous complexity around FDS periods and timing has been simplified, but the core annual consent obligation remains. Check current law and ASIC guidance for the current shape of these requirements.
The annual OFA cycle at a glance
| Step | What is required | When |
|---|---|---|
| Prepare FDS | Document fees charged and services provided in the past 12 months, and fees and services for the next 12 months | Before seeking annual consent |
| Give FDS to client | Deliver the FDS to the client in the required form | Before or at the time of seeking consent |
| Seek written consent | Obtain the client's written agreement to continue the OFA for another 12 months | At least annually |
| Receive consent | Client signs or otherwise provides written confirmation they consent to the ongoing arrangement continuing | Before charging continues |
| Record the conversation | File note documenting what was discussed about fees, services, and the client's response | At the time of any fee discussion |
What happens if consent lapses?
If an adviser fails to obtain the required annual consent, they generally cannot continue to charge the ongoing fee. Charging after consent has lapsed is a compliance breach - not a procedural technicality.
ASIC has taken action against licensees and advisers for failures in the OFA and FDS regime. Common problems include FDS forms that did not accurately describe services provided, consent that was sought but not properly evidenced, and ongoing fees charged after a client relationship had effectively ended.
If consent lapses and you continue to charge the fee, you may need to refund the fees collected during the lapse period. Depending on the facts, it may also be a breach of the adviser's best interests duty and other obligations under the Code of Ethics for financial advisers.
The practical lesson is that the consent renewal process needs a reliable workflow, not a mental reminder. Track the anniversary date for every OFA, and have a process to send the FDS and seek consent well before the deadline.
Why the fee conversation needs a file note
The FDS and the consent form are the formal compliance documents. But the fee conversation - the call or meeting where you discuss what the client has been charged, what they received, and what they can expect - is where the adviser explains the arrangement and invites the client's questions. That conversation needs to be documented.
A file note of a fee conversation captures things the formal forms do not: the client's reaction, any questions they asked, any concerns they raised, what you said in response, and whether they appeared to understand and agree. That record becomes important if the fee is later questioned by the client, by the licensee, or by a regulator.
For more on what a file note for financial advisers should capture in general, see that guide. For the OFA context specifically, the file note should record:
- That the FDS was given to the client and when.
- The fees and services discussed - not just what the forms say, but what you actually talked through.
- Any questions or concerns the client raised, and how you addressed them.
- The client's response - did they consent, did they want time to consider, did they have concerns?
- Any follow-up agreed, such as a review of the scope of services or a change to the fee structure.
The formal FDS and consent form tell you what the client signed. The file note tells you what actually happened on the call.
A contemporaneous note - one written at the time of the conversation, not reconstructed weeks later - carries much more weight if a complaint arises. It is harder to challenge and more credible as evidence of what actually occurred.
For a broader view of how file notes fit into the advice process, see the financial advisers compliance hub and the best interests duty guide. You may also find the file note checklist tool useful for structuring what you capture.
OFAs and the difference between an SOA and an ROA
A common point of confusion: the FDS is not a Statement of Advice (SOA) or a Record of Advice (ROA). They serve different purposes. The SOA is the document you give before providing personal advice - it sets out the advice and the basis for it. The ROA records advice given in a subsequent review where the SOA remains appropriate. The FDS is a fee transparency document: it says what was charged and what was delivered.
For a full comparison of SOAs and ROAs, see that article. The short version: each year's review meeting may generate both a fee conversation (captured in the FDS and the file note) and an advice outcome (captured in an ROA or new SOA if the advice has materially changed).
How CallNote helps with fee and consent conversations
CallNote generates structured file notes from call transcripts. When you have the annual review call with a client - the one where you walk through the FDS, discuss what they received, and seek their consent to continue - CallNote takes the transcript of that call and turns it into a structured note capturing the key points.
CallNote never records your calls. It receives a transcript that your phone system or recording tool provides, processes it, and generates the note. You review the draft, make any edits, then lodge and lock it. Once lodged, the note is timestamped and SHA-256 sealed - a tamper-evident record that the note existed in that form at that time.
For fee conversations, this means the contemporaneous record - what was discussed, what the client said, any concerns raised - is captured without relying on manual notes written after the fact. The audit log shows when the note was generated, who reviewed it, and when it was lodged.
CallNote does not replace the FDS or the consent form. It complements them by giving you a reliable, searchable record of the conversation that happened around those documents. If a client disputes what was discussed or when, the file note is what you point to.
Common questions
Do I need to give a Fee Disclosure Statement to every client on an ongoing fee?
Generally yes, if the client is a retail client and the arrangement involves ongoing fees over more than 12 months, the OFA framework applies and an FDS is required. There are some exceptions - check the current Corporations Act and ASIC guidance, as the DBFO reforms have changed some of the detail.
What happens if a client does not return the consent form?
Without valid consent, you generally cannot continue to charge the ongoing fee. If the consent anniversary passes without consent being obtained, the safe course is to stop charging until consent is received, and review whether you need to refund any fees charged during the gap. Your licensee will have a process for managing this.
Is a signed FDS the same as consent to continue the OFA?
No. The FDS is a disclosure document. The consent is a separate step - the client must actively agree to the arrangement continuing. Some licensees combine the FDS delivery and consent process into one document, but they are legally distinct obligations.
How long do I need to keep fee conversation records?
File note retention requirements for financial advisers are set by the Corporations Act and ASIC requirements, and your licensee will have a specific policy. Seven years is a common benchmark for advice records, but check current requirements and your licensee's rules - some categories of record have longer retention periods.
Can I use a file note as evidence that the client understood their fees?
A contemporaneous file note is useful supporting evidence, but it is not a substitute for the formal FDS and consent form. Where the file note adds value is in capturing the conversation - what the client asked, what you explained, how they responded - which the formal forms do not record. Together, the FDS, the consent form, and the file note give you a complete picture of what occurred.