Rising Tide Blog

We have moved to Annual Agreements

Posted by Matt Hale

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Annual Agreements

In mid-2020, we moved from ongoing service agreements (where clients only needed to opt-in every second year), to annual advice and service agreements (AASA’s for short). This new format means that you as the client get the choice to opt into an advisory relationship with us every year.

What is an annual advice and service agreement?

AASA’s outline the services you will receive over a twelve-month period. Many of our clients have AASA’s that include either one annual review, or bi-annual reviews with a financial planner.

They are signed by both the adviser and the client, and outline the dollar value of the fees you will pay over a twelve-month period – and where it will be paid from (some fees are paid from super accounts and some from cash flow)

Why did Rising Tide move to AASA’s?

Without a doubt, the outcomes and feedback we get from engaged clients is better than that from clients who only work with us on an ad-hoc basis.

I liken it to when you go to the dentist. By going consistently, you can be proactive and avoid the bad stuff. Only go once every two-three years and there are often surprises and poorer outcomes.

Secondly, one of the issues uncovered during the Royal Commission into banking and finance, is that disappointingly, some financial planning businesses were not providing the services the clients had signed up for.

Finally, we believe it is a more transparent way of working and allows us to allocate our time to those who are engaged, fee-paying clients. What services are included if you sign an AASA?

  • Review and planning meeting/s with your adviser
  • Admin assistance
  • Claims assistance if you have insurance policies as well

How much are the Rising Tide fees outlined in the AASA?

This differs for each client and are based on your unique circumstances. The key factors that come into consideration are:

  • Complexity of the advice
  • The number of moving pieces your financial world includes
  • How often you want contact with your adviser
  • How many changes occur, or are likely to occur in your financial world

Most clients pay annually in the range of $4,000 to $12,000 + GST. This is often paid from a combination of their super accounts and bank account and is reviewed annually based on your circumstances.

Remember that these fees are tax-deductible.

Why have Rising Tide’s fees increased in the past two years?

There are two key reasons why we’ve had to increase our fees in the past two years:

1) Our cost to serve has increased. With the implementation of Royal Commission recommendations, we have seen the cost to deliver advice increase by close to 300%

2) Our team spends more time than we ever have engaging with clients to better understand what is important to them. Our goals-based approach helps achieve better clarity and outcomes – as discussed here by Kate (who was referred to us by an existing client)

How does it work?

If you sign an AASA on January 1, the services promised must be delivered and signed off by 31st December of that year. Once those services have been delivered, a new agreement must be signed for the following year.

If a new agreement is not signed, the fees, associated advice and service will cease until a new agreement is signed.

What about if you only have lending with us?

If you only have lending with us, there is no change to your relationship. We get paid by the bank to source the best loan for you, from over 40 lenders.

Please refer to this article by our lending director Sam Gawenda for further information on how our fees are structured for pre-approvals. What about if you only have insurance with us?

We get paid by the insurance provider to assist with claims, so that doesn’t change. If you wish to make changes to your insurance, please remember that there may be a fee associated with the work. However, in all cases we will be crystal clear if there are any fees that you will have to pay prior to undertaking any work.

You’ve previously received superannuation advice from us, but you haven’t signed an AASA in the last 12 months? Please reach out to one of our advisers and discuss your options.

For our team to spend time helping you to achieve your financial goals, an AASA must be in place. If an AASA is not the right option for you, we can help connect you with the right product providers to assist you moving forward.

Any questions? Please send me an email (matt@ctrt.com.au)