What is meant by the “anniversary date” in relation to ongoing fee arrangements?
According to section 962G(3) of the Act, the “anniversary day” refers to the anniversary of the day on which the ongoing fee arrangement was entered into. However, it is not always clear when an arrangement is considered to be “entered into.” In cases where there is a written agreement, the date of entry into the arrangement will generally be when the offer to provide services for a fee for a period of more than 12 months is accepted by the client, or when the client’s offer is accepted by the adviser.
If the arrangement is entered into orally or through conduct, it can be much more difficult to determine when it was entered into. To avoid any ambiguity, it is recommended that the ongoing fee arrangement be recorded in writing, specifying the date it commenced and signed by both parties. This will ensure that the anniversary date is one year after the specified commencement date.
It is important to appreciate the flexibility provided by the law and recognise that ASIC guidance is illustrative rather than prescriptive. For example, where ASIC indicate that a client signing an Authority to Proceed on 15 August 2021 establishes the anniversary day for that arrangement as 15 August, they are not suggesting that the Authority to Proceed is the only way to establish an ongoing fee arrangement. The context, and the understanding of the intent of the parties, will ultimately determine the commencement date.