Pricing Policy

Pricing plans

Financial planning is a relatively new profession, and still developing its professional identity. No one fee arrangement has been set for the industry although the government are continually tightening the reigns to ensure fair value is achieved for consumers. Professional financial advisers have been encouraged to use the established codes of ethics, values and professional cultural norms when deciding on fee arrangement.

Retirement Services Australia have researched many different pricing approaches. Below is an overview of the pricing models applied with clients. To understand the basis for our pricing policy methodology - click here. We allow clients to select their preferred pricing model in most instances.

Fee Models

Retirement Services Australia have two primary advice areas where fees are charged. The first is for consulting services, that generally include the provision of advice designed to resolve problems or set clients on the right path for the future. For these services we apply fixed fee or time cost billing. The second area of advice is related to investing through super funds, pension funds and personally. RSA set benchmark investment return objectives for clients (for example 10% per annum net of fees), and then construct and manage fund or product selection, investment selection, investment switching and ongoing management, with a singular focus, to exceed the agreed benchmark return reliably over time, within appropriate risk parameters. For this service RSA charge an Asset Management Fee and a High Performance Bonus Fee.

Time cost billing

This is based on a unit billing rate. The standard rate is $350.00 plus GST for each hour of time. Time is billed in units, where one unit represents 6 minutes. Seniors Card holders receive a 20% discount on all fees.

Fee For Service

The fee for service model is applicable when strategic advice is being provided and is calculated based on the estimated amount of work required. This is based on the complexity of a client's circumstance and the client's knowledge and confidence in their ability to understand the advice being delivered. - Please click here to learn more about how this process is applied client complexity matrix (learn more)

Assets Under Management Fee

The AUM model charges clients a percentage-based fee based on portfolio value. This model is relevant for clients who require advice regarding products, investment portfolios, investment strategies and ongoing asset management services are provided.

High Performance Bonus

A high performance bonus is applied to clients who use RSA to manage investment portfolios within super funds, pension funds and investment portfolios. The high performance bonus is payable to the asset management team if client return objectives are exceeded. For more information on RSA's high performance bonus calculation methodology - click here.

Consent requirements

The new ASIC consent requirement, expansion applicable from 1 July 2021 places the burden of proof on advisers to ensure that you, as a client understands the services we are providing and also the fees being charged for our services. Legislative requirements refer to the adviser’s responsibility in relation to advice provided, the products recommended, and consent to provide services and charge fees.

The FASEA Financial Planner Code of Ethics consent conditions arguably go further than the legislation by requiring evidence that an adviser both does the right thing and that their client knows they are doing the right thing.

Advantages and disadvantages of the different models

Fee for Service
Benefits Clients is charged a fixed fee and they know what they are paying up front Fair payment based on complexity of services is required Advisers know what their revenue from a client is for the year Performance of financial markets and the adviser are separated	Drawbacks Charging based on a 'standard price' may negate unforeseen complexities Advisers may be overpaid if they incorrectly asses a clients needs There is a reasonable probability that one party will be over or under charged based on the high probability that perfectly identifying work required is unlikely.
Time Cost Billing
Benefits There is a fixed rate per hour Costs incurred are based purely on time which reflects complexity The adviser is charging directly for their expertise	Drawbacks The adviser may 'make up hours' because they have the capacity to complete the work for a client in less time than referenced. Clients may not understand exactly what they are being charged for. If an adviser forgets to record time whilst working with the client and days later tries to record the information, there is potential to over or under charge.
AUM
Benefits Clients can pay their fees from their managed assets As the portfolio increases or decreases the fees paid to the adviser reflect this. A higher return may be acheived by the adviser for the clients as they are essentially incentivised to perform, when the advisers income is dependant on AUM increasing/performing.	Drawbacks The adviser may place client funds in riskier investments that are not suited to their risk tolerance levels to receive more revenue. A potential conflict of interest may exist when recommending investments based on AUM as the adviser could earn higher revenue by recommending the client invest in certain investments.

RSA will discuss with you all fees and make sure that you understand both what we are doing for you and also what you pay for advice.