23 September 2024
Re: Office of the Tasmanian Economic Regulator (OTTER): Inquiry to assess fees and charges for clients who are required by legislation to use the Public Trustee’s services. (IRPT C3.1)
The Independent Review into the Public Trustee (IRPT), commissioned by Government, and conducted by Damian Bugg AM KC, was completed in November 2021.
Since that time, the Public Trustee has undergone unprecedented organisational change becoming a more client focused and responsive organisation. Central to the transformation has been the completion of 26 of 28 recommendations which has been achieved by actively engaging and working with our clients and stakeholders throughout the process.
Pleasingly, we are already seeing the impact of these initiatives. A recently commissioned independent survey from Myriad Research shows a significant improvement in client satisfaction.
- 81% Positive Client Experience
- 88% Satisfaction with Client Account Manager (CAM)
- 91% Reported CAM treats me with respect
- 89% Reported confidence in their CAM’S knowledge
- 90% Confidence in bill payments
- 83% Accuracy of financial information
- 78% Helpfulness on the first call
- 93% Understanding of the Public Trustees role
- 84% Satisfaction with the way the Public Trustee communicates
- 83% Reported staff provide explanations when requests for money are declined
- 92% Reported they know who to contact for queries
- 94% Reported the Public Trustees role has been made clear to them
Critical to our progress has been a focus on front line services. With additional resources now in place around Tasmania and significantly reduced caseloads, our clients can access the personal service they need. Clients and stakeholders have reported increased visibility, accessibility, and responsiveness since the significant reduction in caseloads.
In October 2023, we launched our supported decision-making framework placing people with impaired decision making at the centre of decisions that impact their lives, respecting their rights, will and preference.
The framework aligns with the recently legislated Guardianship and Administration Amendment Act which came into effect in September 2024. In addition, our new financial independence pathway was launched, empowering clients to build capacity and skills to increase independence in managing their financial affairs.
Through our wills and estate administration arm, the Public Trustee continues to deliver vital services, helping reduce levels of intestacy in Tasmania as well as supporting beneficiaries in our role as executor. Annual Survey results once again reported high levels of customer satisfaction for these services.
Recommendations supported in-principle
The Public Trustee welcomes the OTTER report, viewing it as another important step forward and opportunity to continue the transformation of the organisation. We would like to acknowledge OTTER for the work they completed and the opportunity for the Public Trustee to provide a submission to the review.
The OTTER report made 34 findings and 18 recommendations with 3 additional notes for consideration.
We acknowledge the report highlights several areas requiring review and change. The Public Trustee, through its active participation in the review and its own submission, self-identified many of these findings. Many findings reflected long-standing practices which date back many years and in some cases decades. The organisation has spent the past 2 years with a focus on improving the client experience. With the OTTER review now completed and many aspects of our client service model in place, we can focus on the required areas for change identified in the report.
The Board is committed to continuing our work with Government, in consultation with our clients and stakeholders, implementing the required changes from this report to ensure we deliver the best services at the lowest possible cost to the people in the Tasmanian community whom we support. At the same time, we will strive for greater efficiency and the ability to measure inputs, outputs and importantly outcomes.
Significant progress already
I am pleased to report that in the short time since receiving the report we have already made significant progress completing 9 of the 18 recommendations with a further 6 in progress.
Completing all the OTTER recommendations is a significant task and will take time to fully implement. We will continue to work diligently to make the necessary improvements approaching the report with the same commitment we demonstrated completing the Independent Review Public Trustee (IRPT).
In addition, following the public release of the OTTER report from the Government, the Public Trustee will continue to actively engage and consult with our client and stakeholder reference groups as we implement the recommendations from the report.
Operating Cost Comparisons
The Public Trustee’s new ‘client centric approach’ as recommended in the IRPT and required by the recent changes to the Guardianship and Administration Act (reflected in our new supported decision-making framework), has wide support in the Tasmanian Community, with endorsement from clients of the Public Trustee and the Stakeholder Reference Group. Positive client outcomes are evidence that it is clearly the right approach and direction. Our supported decision-making framework and practices are at the forefront of reform in the country.
The OTTER report draws operating cost comparison to other Public Trustee jurisdictions, albeit at a high level and with limited data to support. This comparison has been made purely on a quantitative basis and does not take into consideration any qualitative analysis such as the experience of the person who is being supported under an administration order. Furthermore, there are notable differences between jurisdictions, making direct comparisons problematic.
Making comparisons between larger jurisdictions and Tasmania can be best described as a case of comparing ‘oranges with apples.’ Key differences include the service model itself, access to support, level of client contact, caseload management and KPI’s. Tasmania’s significant demographic differences, ageing population, financial asset base and having the most dispersed population are also factors for consideration. These factors will continue to impact on the cost of providing services.
The Board is, however, committed to striving for greater efficiency and the ability to measure inputs, outputs and importantly, outcomes for people with impaired decision making.
Next Steps
The Public Trustee Board notes the announcement by the Government of its intention to re-structure the Public Trustee. The Board remains committed to the clients and staff of the Public Trustee so will work constructively with the Government to represent the interests of our clients and help inform the transition to ensure the restructured services incorporating recommendations from the OTTER report continue to be best practice and that all clients receive quality, effective and efficient service.
Yours sincerely
Therese Taylor Chair
Public Trustee
Appendix A: The Public Trustee’s Response to the Findings
| No. | Description | Reference | Response |
| 1 | The Public Trustee is in the process of transitioning its service delivery from a substituted decision-making model to a supported decision-making model to reflect industry best practice. | 5.1.1 | Finding Supported In October 2023, The PT launched its new Supported Decision-Making framework placing people with impaired decision making at the centre of decisions that impact their lives, respecting their rights, will and preference. The framework aligns with the new Guardianship and Administration Amendment Act which came into effect on September 1st 2024. |
| 2 | The Public Trustee’s total operating expenditure increased significantly from $8.8 million in 2021-22 to $10.6 million in 2022-23 and is forecast to continue to experience large increases to 2026-27. The Public Trustee attributes these increases to its changing service delivery model. | 5.1.1 | Finding Supported Criticalto our progress has been a focus on resourcing. After a major recruitment drive, caseloads were significantly reduced from 150 to 50 clients per Client Account manager. With additional resources located around Tasmania providing dedicated support, our clients can now access the personal service they deserve, and our staff are given the support they need. |
| 3 | At the same time as increasing its operating costs, the Public Trustee has experienced a decrease in its represented person clients in 2021-22 and 2022-23. With legislative amendments scheduled to come into effect in September 2024 to make the Public Trustee the administrator of last resort, the Regulator anticipates that the trend of declining represented person clients will continue. | 5.1.1 | Whilst Represented Person (RP) client numbers decreased by 4.1% in 2022-23 and 3% in 2021-23, client numbers have increased 13.7% over the last 5 years. In the event RP numbers materially decline then future Community Service Obligation funding requirements would reduce. The PT forecasts that the increased level of engagement and complexity required from administrators, Tasmania’s ageing population and subsequent increase of age-related illnesses such as dementia coupled with the large number of Tasmanian’s not having Enduring Powers of Attorney in place will outweigh the increased number of TASCAT private appointments driving RP numbers higher and impacting resource requirements. The above PT view is consistent with Damian Bugg’s finding in the IRPT. (IRPT pg. 74 paragraphs 4,5) |
| 4 | The Public Trustee does not utilise timesheets or other methods to track time and effort against each of its services. As such, it has not been possible to obtain sufficiently accurate cost information to determine if its costs are efficient on an individual service level. | 5.1.2 | Finding Supported Whilst it is common in professional services such as accounting or legal firms to track and charge on an hourly rate it is equally common practice in financial services to not track and charge on such a basis i.e. Financial Advice & Investment Management fees are often set at levels or charged as a %. Our existing practice is consistent with the majority of Trustee Companies around Australia. |
| 5 | Based on the benchmarking comparison with other Australian public trustees’ operating costs, particularly in comparison with Victoria which has fully implemented a supported decision-making framework, the Regulator considers there is evidence to suggest that the Public Trustee’s total operating costs and costs for delivering financial administration services to represented person clients are too high. | 5.1.3 | Analysis provided by OTTER doesn’t properly account for the significant differences between jurisdictions. Comparisons have been made without taking account of the different models and frameworks. This benchmarking was calculated on a purely qualitative basis. It does not consider the client experience in any way. Tasmania’s model was developed directly in response to the IRPT recommendations and is a relationship-based model with a direct client to account manager relationships. Our supported decision-making framework has been recognised as leading the way in Supported Decision Making which includes KPI’s around personal contact and consultation. From previous analysis we know the new KPIs set at the PT and our decision-making model aims to be best practice in line with the IRPT recommendations. Making comparisons between other larger jurisdictions and Tasmania can be best described as a case of comparing ‘oranges with apples.’ Key differences include scale differentials, the service model itself, access to support, level of client contact, caseload management and KPI’s. Tasmania’s significant demographic differences, ageing population, financial asset base and having the most dispersed population are also factors for consideration. These factors will continue to impact on the cost to serve. |
| 6 | Based on an examination of the Public Trustee’s financial information, the Regulator found that the Public Trustee recognises all of its costs in accordance with full cost attribution. | 5.2.1 | Finding Supported The Public Trustee operates off legacy systems that are currently being addressed via the IT Strategy. |
| 7 | The Regulator has been unable to assess the Public Trustee’s cost recovery for clients who are required by legislation to use its services, as the Public Trustee was unable to provide disaggregated revenue data. | 5.2.2 | Finding Supported The Public Trustee operates off legacy systems that are currently being addressed via the IT Strategy. |
| 8 | It is acknowledged that there is complexity in the relationships between the cohort of clients that are required by legislation to use the Public Trustee’s services and its Community Service Obligation (CSO) clients. These relationships are illustrated in Figure 1 in section 3.6 of this report. However, there appears to be some misunderstanding by the Public Trustee about these two cohorts of clients. This has made it difficult for the Public Trustee to separate its regulated clients from other clients for the purposes of this inquiry. | 5.2.2 | It is correct to state the PT had difficulty separating regulated clients from non-regulated clients. However, it is incorrect to suggest there is a misunderstanding about at the PT about the two cohorts. The PT provided the different descriptors for each regulated client group which informed the Treasurer’s terms of reference request to OTTER. What has been important historically is to be able to identify and separate CSO clients from commercial clients for our CSO funding and reporting requirements to Government. The has been no historical necessity to separate regulated from non-regulated clients. |
| 9 | Based on analysis of the Public Trustee’s costs and revenue for providing services to its CSO clients, the Regulator found evidence of cross-subsidies between CSO clients and non-CSO clients. While this cross-subsidisation likely includes clients who are required by legislation to use the Public Trustee’s services who are not CSO clients, it has not been possible to identify the extent to which these clients are subsidising the fees of non-regulated clients due to data limitations. | 5.2.2 | Finding Supported The PT shares this view and highlighted this to OTTER. Our own submission advocates for a move to a fee for service model replacing the legacy commission fee structure within the regulations. The outcome from this fee structure is Commercial clients in effect Cross-subsidise services provided to CSO clients. It is common across industries which charge on a commission/percentage basis (ie; Superannuation, Funds management, Real Estate) the level of fee payable is linked to the size of the asset or income as opposed to the work output. |
| 10 | For most services, the Public Trustee typically charges the maximum permitted under the Public Trustee Regulations 2019 in pursuit of its commercial objectives as a Government Business Enterprise. It may not be appropriately balancing its competing interests of maximising revenue and protecting the interests of its vulnerable clients. | 5.3 | It is correct to say that when standard fees and charges are being applied, they are typically at the maximum. However, it is incorrect to say the PT typically charges the maximum permitted. It is important to note, that OTTER reports 94% of all Represented Person’s fees are significantly less than the maximum permitted or not applied at all. Whilst there is a ‘potential’ to not appropriately balance competing interests, there is no evidence of this. The actions taken at the PT with its new client-centric model and dedicated approach to implementing the IRPT recommendations combined with the positive client and stakeholder feedback demonstrate and prove the PT is focused on protecting the interests of its vulnerable clients. Furthermore, the organisation is currently not required to pay a dividend to Government and in FY21-22 a loss was posted and in FY22-23 it posted a small profit. The PT Annual report shows over the last ten years show the service supporting represented persons runs at a considerable loss and requires significant support from Government through its CSO funding arrangements. There has been a CSO funding shortfall over the past decade and beyond. |
| 11 | The Public Trustee’s fees and charges for different services are unlikely to reflect its costs of delivering these services. | 5.3.1 | Finding Supported The PT shares this view and highlighted this to OTTER. The legacy capital and income commission model and regulation requires a review and overhaul. The PT’s own submission advocates for a move to a fee for service model as an alternative to commissions and to better reflect the cost-of-service delivery. |
| 12 | Stakeholder feedback indicates that the Public Trustee’s represented person clients often do not understand its fee structure and are not provided with any fee estimates when first placed under an administration order. | 5.3.1 | Finding Supported The Public Trustee has in conjunction with SpeakOUT Advocacy developed ‘Plain English’ and ‘Easy Read’ guides to Financial Administration to assist with fee structure comprehension. In addition, changes to the ‘Getting to Know You’ client onboarding process include a personal meeting to explain the fees and charges as they specifically relate to that person. The PT submission advocates for a move to a fee for service model to simplify fees and further aid client comprehension. |
| 13 | As evidenced by comments made by stakeholders, the levying of a 2.2 per cent capital commission on unrealised assets can place a financial burden on clients and necessitate clients needing to sell assets to finance the Public Trustee’s fees. | 5.3.1 | Finding Supported The PT shares this view and highlighted this to OTTER. Our own submission advocates for a move to a fee for service model replacing capital commission. It’s important to note, the application of this fee occurs in a small sample of cases. OTTER referenced Fee waivers have regularly been applied at the discretion of the PT CEO where the fee is deemed excessive. The PT will review this fee. |
| 14 | While the Public Trustee charges its fees in accordance with the maximums permitted under the Public Trustee Regulations, client representative organisations consider that commission arrangements are unfair and do not reflect the level of service received. | 5.3.1 | Finding Supported The PT supports the view that a capital and income commission structure can at times result in fees not reflecting the level of service which included under charging as well as over charging. The PT submission advocates for a move to a fee for service model replacing commissions. Changes are required to the Regulations which prescribe the Public Trustee fees. In addition, any reduction in fees will require the support of Government through the CSO funding agreement. |
| 15 | Based on comments provided by stakeholders during the inquiry, the Regulator questions the appropriateness of the Public Trustee levying the full income commission of 6.6 per cent on Australian Government income streams such as the aged pension and disability support pension for low-income clients. | 5.3.2 | The Public Trustee is not levying the full 6.6% income commission on all Government Income Streams. The OTTER report shows approximately 94% of RP clients pay either NIL or a reduced income commission. This leaves a residual 6% of clients that have 6.6% income commission levied. No income commission is charged on Government pensions for clients with less than $10,000 in assets. OTTER reports this represents 44% of our RP clients. Client with assets between $10,000 and $100,000 pay a reduced income commission of 2.2%. OTTER reports this represents 45% of RP clients. Further discounts/waivers can be applied to this segment however this would require support from Government with increased CSO funding. The PT OTTER submission advocates for a move to fee for service model which would replace the capital and income commission model all together. |
| 16 | The Public Trustee may be incentivised to direct client investments into its own investment funds as it only receives income commissions on interest and dividends from investments in its common fund or group investment fund. | 5.3.2 | Whilst a ‘potential’ conflict of interest exists, there is no evidence to suggest this occurs. The Public Trustee submission to OTTER advocates for a move to fee for service and moving away from the capital and income commission model all together. |
| 17 | The Public Trustee charges an investment management fee of 1.1 per cent per annum on the capital amount of investments managed by external providers. Most clients with external investments are likely to be paying multiple sets of management fees on the same investment. It is unclear what service the Public Trustee is providing to clients for this fee. | 5.3.3 | Finding Supported Whilst 1.1% is the maximum fee, a reduced fee of 0.55% is applied. The number of impacted clients is approximately 15. This fee has recently been reviewed and will be discontinued effective October 1 2024. |
| 18 | The Public Trustee does not publish the investment management fee for funds it manages (such as in its common fund or group investment fund) on its website or in its fee schedule. | 5.3.3 | Finding Supported This has since been corrected with disclosures available within the new Financial Services Handbook and disclosed on the PT website. |
| 19 | No investment management fees are visible on the client statements viewed by the Regulator. The Public Trustee confirmed that investment management fees are deducted from income received, such as interest, prior to its distribution to clients consistent with traditional funds management in Australia. | 5.3.3 | Finding Supported Amendments to client statements requires system enhancements. The Public Trustee is working with legacy systems, and this is being addressed as part of the overall IT strategy. |
| 20 | The remaking of the Public Trustee Regulations in 2019 removed a previous regulation that prescribed a list of additional fees and charges. This change has reduced the oversight of the other fees, in addition to the income commission, capital commission and investment fees, levied by the Public Trustee. | 5.3.4 | Finding Supported The Public Trustee Regulations are a matter for Government. The Public Trustee is supportive of any increase in oversight. |
21 | There appears to be confusion as to whether the fee waiver for the costs of the Tasmanian Civil and Administrative Tribunal Annual Review as included in Schedule 1 of the CSO Agreement applies only to CSO represented person clients or to all represented person clients of the Public Trustee. | 5.3.4.1 | This is a matter for Government. The PT advised OTTER in writing during the review confirming our understanding that it sits within the CSO Agreement therefore when it references Represented Persons it refers only to those captured under the CSO agreement which means assets $100,000 or less. OTTER advised neither Government nor the Department of Treasury were able to provide confirmation. |
| 22 | There is confusion as to whether the fee waiver for establishment fees for represented person clients, as set out in Schedule 1 of the CSO Agreement, extends to all represented person clients or only CSO represented person clients of the Public Trustee. | 5.3.4.1 | This is a matter for Government. The PT advised OTTER in writing during the review confirming our understanding that it sits within the CSO Agreement therefore when it references Represented Persons it refers only to those captured under the CSO agreement which means assets $100,000 or less. OTTER advised neither Government nor the Department of Treasury were able to provide confirmation, so the confusion lay with other parties. |
| 23 | Based on advice received from stakeholders, the Public Trustee levies multiple emergency order management fees where more than one staff member is required to be in attendance. | 5.3.4.3 | Finding Supported On occasion, for the safety and wellbeing of our staff when visiting clients it is necessary for 2 staff to attend an emergency order in which case the hourly rate charged is for 2 staff to attend rather than 1. This occurs only in a small number of identified cases. |
| 24 | The Public Trustee charges an hourly legal fee for legal services provided in the course of delivering financial administration, estate administration and trust management services, on top of the commissions charged. | 5.3.4.4 | Legal fees are only charged for separate legal expenses incurred, not for the same type of administration service. Services are sought both from external legal firms or on occasion our internal legal services. Total revenue from internal legal services was only $27,709 and not a material revenue line. |
| 25 | The Public Trustee currently charges an hourly rate of $430 for legal services. This fee is not made available on its website. Rather, the website provides that legal services are charged at a rate determined by the Public Trustee but not exceeding the maximum hourly attendance rate set out in the Supreme Court Rules 2000. | 5.3.4.4 | Finding Supported The hourly rate is between $194 per hour and a maximum of $430 per hour. The website has now been updated. |
| 26 | The Public Trustee levies an account keeping fee on all regulated clients except represented person clients with assets of less than $100 000. The monthly account keeping fee of $13.50 is higher than the account keeping fee charged by commercial banks. | 5.3.4.4 | Finding Supported It is important to note that OTTER reported approximately 94% of PT Represented Persons have assets less than $100K which means the monthly account keeping fee does not apply for the majority of clients. Therefore, this applies only to a small number of clients. The PT submission recommended a move to fee for service to simplify and consolidate fees to make things easier for clients to understand. Revenue from monthly account keeping fee is circa $144K. Any Reduction in fees will require support from Government with increased CSO funding. |
| 27 | The Public Trustee levies transaction fees on all of its clients based on the number and type of transactions made. It is not clear what additional work clients are paying the Public Trustee for via these transaction fees, particularly in the instance of direct debit fees, which are automated once the periodic transactions have been set up. | 5.3.4.6 | Finding Supported OTTER found the Public Trustee systems to be old and not integrated. The existing legacy system doesn’t support direct debits in the traditional Banking sense. Payments still require some manual inputs to establish and vary payments including periodical payments. The PT submission advocated for a move to fee for service. Any Reduction in fees will require support from Government with increased CSO funding |
| 28 | The Public Trustee will sometimes waive fees and charges for a client upon request in cases of hardship or where the charges are excessive taking into account the amount of work involved. The Public Trustee’s fee waiver policy is not public and does not appear to be uniform in its application. | 5.3.4.7 | Finding Supported Staff are proactive bringing cases forward to reduce fees where the capital/income commission appear excessive. The policy has recently been reviewed and enhanced to provide more of a decision-making framework including steps for the fee review process. Subject to approval, the Policy is due to be made Public on the website on October 1st 2024. |
| 29 | The Regulator found that the consistency of the Public Trustee’s fees and charges with other public trustee offices in Australia differs across the services provided: ▪ for represented person clients with assets of $100 000 and over (represented persons who are not CSO clients), the income commissions and capital commissions are among the highest in the country; ▪ for estate clients, the commission rates charged rank as average; and ▪ for trust clients, the commission rates are at the lower end of fees charged nationally. | 6.2 & 6.3 | Finding Supported OTTER reported only a very small minority of PT TAS RP clients (6%) have assets over $100,000. OTTER reports 94% of RP clients have less than $100,000 in assets and pay significantly reduced fees including no capital commission or either no income commission or significantly reduced income commissions in comparison to most other jurisdictions. The Public Trustee has previously identified and put forward as part of the budget submission for 2022-23 the funding required to adopt the fees of the Northern Territory as recommended in the IRPT item |
| 30 | Unlike the Public Trustee, public trustees in other Australian jurisdictions apply a reduced income commission on Australian Government payments, such as the aged pension or the disability support pension. | 6.2 | No income commission is charged on Government pensions for clients with less than $10,000 in assets. OTTER reports this represents 44% of PT TAS RP clients. Clients with assets between $10,000 and $100,000 pay a reduced income commission of 2.2%. The PT OTTER submission advocates for a move to fee for service model replacing income and capital commissions. |
| 31 | The systems used by the Public Trustee are old and not integrated. As a result, the data provided has at times differed, depending on who accessed it and which system it was accessed from. | 7.1 | Finding Supported The Public Trustee is working with legacy systems with no real time data synchronization between the two core systems: TACT and CMS. This is being addressed as part of the overall IT strategy. |
| 32 | The Public Trustee is not transparent with the fees and charges applicable to different clients, with no one central document/schedule that explains all the fees and charges that could be levied on clients. | 7.2 | The Public Trustee website displays its fees in a transparent manner and shows a breakdown of our fees per service type which assists in clients understanding the fees which are relevant to the specific service applicable to them e.g. Financial Administration, Estate Administration, Trusts etc. A Financial Services Handbook has since been developed providing a central document available on the website. |
| 33 | There is the potential for competitive neutrality concerns arising from the Public Trustee’s allocation of Government grant funding and concerns that more stringent regulatory frameworks are imposed on private sector operators compared to the Public Trustee. | 7.4 | The Public Trustee has considered competitive neutrality in its allocation of IRPT grant funding. Neither IRPT grant funding or CSO funding is used towards Will and legal document writing services and overall, the funding is not allocated to support this service line. Pricing for remaining non-CSO Trustee services including but not limited to Will writing & Estate Administration is done adopting a corporatised model with discounts applied to some Will Writing services which is consistent with the corporatised approach taken by competing ASX listed Trustee Company in Tasmania (TPT Wealth part of MYS). As part of the Public Trustee providing education and public information presentations to the Tasmanian community as recommended in IRPT 4.1, some funding supports developing, promoting, and running public information sessions which are provided for the benefit of the general public. The CSO funding does not cover Will and legal document writing services and the funding does not support this service line. |
| 34 | Unlike private trustee companies that are required to comply with the requirements under the Commonwealth Corporations Act 2001, State and Territory public trustee offices are only required to comply with requirements of their respective Trustee Companies legislation, as State and Territory offices are eligible to opt-in to the national regulatory framework but are not required to. | 7.5 | Finding Supported Public Trustee companies play a specific role in providing support and services to clients in the community with low assets or require support that would not otherwise be accessible via the private sector including private legal firms. This is recognised in legislation to enable Trustee Companies to operate in this fashion whilst still ensuring professional services are maintained. |
Appendix B: The Public Trustee’s Response to the Recommendations
| No. | Description | Action | Status |
| A | The Public Trustee undertakes an efficiency review of its operations after it has completed the implementation of the supported decision-making model in September 2024. The review should be commenced by no later than November 2024. | Supported The Public Trustee will undertake an efficiency review of its operations. Further consideration is required as to the appropriate timing. The new Guardianship & Administration Legislation commenced September 1st initially with a 2-month transition period. This represents a significant change for the way the Public Trustee operates and supports its clients. Sufficient time is required to fully assess the impact of the changes prior to conducting an efficiency review. | |
| B | The Public Trustee implement a more robust system for tracking time and effort spent in delivering its services to clients, to ensure that costs are allocated accurately. | Supported The PT operates on legacy systems which is being addressed as part of the overall IT Strategy. Systems solutions are currently being evaluated to enable a more robust system for tracking time and effort and cost allocation. | In progress |
| C | The Public Trustee urgently reviews its cost allocations across the business and ensures that it is able to track its cost allocations on an ongoing basis. | Supported The PT operates on legacy systems which is being addressed. As part of the overall IT Strategy. A finance system specification has been prepared to use in a procurement process for a new accounting system to enable tracking of cost allocations on an ongoing basis. | In progress |
| D | The Public Trustee conducts a review of its fees and charges to ensure that clients required by legislation to use its services are not subsidising the fees of other clients. | Supported A review of fees is being undertaken. As outlined in our submission to OTTER a contemporary fee model will address subsidisation. | In progress |
| E | The Public Trustee reviews and justifies the levying of an investment management fee on assets outside of its own funds. | Supported Annual Investment Management revenue charged from externally managed investments was not material and applied to 18 clients. The Public Trustee has since reviewed this fee resolving it to be discontinued effective October 1 2024. | Completed |
| F | Consideration should be given to standardising the name of the investment management fee (referred to as a “trustee fee” in relation to its investments in its common fund and group investment fund) to ensure clients are aware of what fees they are being charged. | Supported The policies have been updated to standardise the name to Investment Management Fee | Completed |
| G | The Public Trustee publish the investment management fee it applies to investments in its common fund and group investment fund on its website and in its fee schedule. | Supported Investment management fees published on the website and fee schedule. | Completed |
| H | To increase transparency around the application of the investment management fee, the Public Trustee separates and identifies the fee on a client’s statement. | Supported The Public Trustee operates on legacy systems which is being addressed as part of the overall IT strategy. Statement modification requires system enhancement. Systems solutions are currently being evaluated. | In progress |
| I | To reduce confusion regarding its obligations under the Community Service Obligation Agreement with the Government, the Regulator considers that the Public Trustee should seek clarification as to whether the annual report fee and establishment fee are intended to be waived for all represented person clients. | Supported This is a matter for Government. The Public Trustee has written to Government seeking their clarification. | In progress |
| J | The Public Trustee reviews its fee schedule as it relates to emergency orders to ensure that clients and their representatives are aware of the maximum fees that may be charged. | Supported Fee schedule reviewed and wording updated on website and fee schedule. This item relates to when two staff are required to attend an appointment for Work health & safety reasons. | Completed |
| K | In the interests of transparency, the Public Trustee should publish the hourly rate it charges for legal services on its website. | Supported Hourly rates for legal services have been updated and published on the website. | Completed |
| L | The Public Trustee provides justification for the charging of legal fees, in addition to capital and income commissions. This justification should be made in terms of additional expense incurred, that has not been adequately covered by the capital commission and income commission levied and that the private sector is unable to levy commissions and hourly rates for legal fees as it is considered ‘double dipping’. | Supported Legal fees are only charged for separate legal expenses incurred which are not covered under capital and income commission. The fee charged is not for the same type of administration service. Legal services are sought both from external legal firms or on occasion our internal legal services. | Completed |
| M | The Public Trustee reviews its application of account keeping fees and justifies the charging of this fee, in terms of additional expense incurred that has not been covered by the capital commissions and income commissions levied. | Supported A review of fees is being undertaken. Reductions in fees will require support from Government through increased CSO funding. | |
| N | The Public Trustee reviews and provides justification for the levying of transaction fees, in terms of additional expense incurred that has not been covered by the capital commission and income commission levied. | Supported A review of fees is being undertaken. Reductions in fees will require support from Government through increased CSO funding. | |
| O | The Public Trustee should ensure that, at a minimum, it is meeting the Financial Service Guide fee and charge information provision requirements placed on private sector trustee companies under the Corporations Act 2001. | Supported The Public Trustee is meeting its fee and charge information provision requirements. A Financial Services Handbook has also been created and made available on the PT website. | Completed |
| P | Given the issues identified by the Regulator regarding the availability and accuracy of data provided by the Public Trustee during the inquiry, the Regulator considers that the Public Trustee’s systems should be audited. | Supported Deloitte have been engaged to undertake an audit of the Public Trustee systems in the first half of FY25. | In progress |
| Q | Based on the consultation feedback received during the inquiry, the Regulator recommends that the Public Trustee provides more cost information to represented person clients. Where possible, this should include a capital commission quote at the beginning of a financial administration order based on an estimate of the client’s asset values. This should include information on the capital commission levied on unrealised assets. | Supported Information regarding fees and charges is now provided to RP when PT first appointed. Following this, as part of the onboarding process the cost of PT services is provided tailored to the client’s individual situation including illustrations of any potential unrealised capital commission. | Completed |
| R | The Public Trustee review its fee waiver policy to ensure that it is applied in a transparent, consistent, and fair manner. | Supported A policy and decision framework to ensure fee waivers are applied in a transparent, consistent, and fair manner has been developed. Remissions will be considered in the following circumstances: (a) in cases of hardship; and (b) in cases where the charges are excessive considering the amount of work involved. The Policy will be available on the PT website October 1st 2024. | Completed |