The Federal Government has announced a relief measure for financial advisers to meet their ongoing fee disclosure obligations.

The relief measure applies to the interim arrangements for provision of fee disclosure statements to clients during the annual renewal one-year transition period starting on July 1.

“The Government is aware that industry may have difficulties generating an accurate fee disclosure statement during the transition period of July 1  2021 to  June 30  2022 as fees are required to be reported up to the day before the statement is issued,” a statement from the press office of Financial Services Minister Jane Hume said.

“To address circumstances where advisers are unable to report actual fees in the required time, the Government will make a regulation to allow financial advisers to report an estimate of fees for the 60  days prior to the statement being issued.

“The estimate would be reported alongside the actual fees charged for the remainder of the previous 12  months.”

The statement says the regulation will only apply for the transition period. After the transition period, advisers will have 60  days from the anniversary date to issue their fee disclosure statements which must report all fees paid in the previous 12  months.

Last month the Association of Financial Advisers (AFA) raised concerns about the interim arrangements, saying it is “simply not possible” for advisers to prepare a financial disclosure statement in one day.

It said it had submitted a request to the Australian Securities and Investments Commission to take a “facilitative compliance” approach during the transition year. The request was made jointly with the Financial Planning Association.

AFA says the relief proposal means that advisers will be required to provide a financial disclosure statement that covers a 12-month period, with the first 10 months based upon the actual fees paid and then an estimate for the remaining two months that would cover the period up to the day before it is provided.

“We appreciate that the requirement to add an estimate for the final two months will add additional complexity  and this might make [financial disclosure statements] more manual than usual during this transition year,” the AFA said.

“The Minister has committed to this regulation being in place by July 1. We thank the Minister for responding to this issue and coming forward with a solution.”

In changes to fee disclosure statements as recommended by the Hayne royal commission, advisers are required to include information on the fees to be charged and services to be provided in the coming year, as well as information about the previous year.

Previously fee disclosure statements were retrospective, providing a summary of the fees and services provided during the previous year.