Proposed fees and charges reform

The objectives of QPT’s proposed fees and charges reform are to:

• Take all practical steps to ensure that customers pay no more in fees than what it costs QPT to provide the service
• Ensure any fee increases consider both social implications, including cost-of-living challenges, and QPT’s long-term financial sustainability
• Increase cost recovery from deceased estate administration, while ensuring that any transition to higher fees occurs gradually to prevent a significant restriction of access for vulnerable customers
• Simplify QPT’s fee structures to make them easier to understand
• Ensure that any subsidy provided to customers is a deliberate government decision that balances the public interest and the cost of community service obligation commitments.

QPT is one of the only public trustees in Australia that continues to provide free universal Will-making services.

We recognise that Queenslanders are facing financial challenges with the current cost-of-living crisis, therefore we are not proposing to charge for Will-making services at this time.

As part of this consultation, we welcome feedback on QPT’s free Will-making service.

The options proposed would simplify the fee structure for the key services of financial management, deceased estates and trust administration, to make it easier for customers to understand what fees they would be charged.

It is anticipated that if fee reforms are approved, the majority of financial management customers would only see one fee rather than multiple fees in their statements.

For trust and deceased estate services, customers would be able to compare QPT’s fees more easily with services being provided in the market by private providers.

Fee rebates for financial management customers are not changing. However, as part of this consultation, we are seeking feedback on potential future adjustments to the fee rebate program to ensure the long-term sustainability of the program.

For deceased estates and trust services, the consultation paper includes discussion of possible changes to rebates within the two fee options presented for consideration.

The proposed fees and charges reform for financial management services seeks to ensure customers pay no more in fees than the cost of providing the service. We propose to make things easier to understand with a simpler fee structure.

Both options would:

Align personal financial administration fees to service costs, leading to a more equitable outcome for customers.

Address stakeholder concerns in relation to the current asset management fee being high relative to the actual workload.

Provide a positive resolution to stakeholder concerns, including superannuation and nursing home bonds in the assessable asset calculation leading to higher asset management fees.

Provide a contemporary fee structure that is easy to understand, with 95% of customers no longer having to pay a separate fee for asset management. The remaining 5% of customers may have additional fees related to an investment property or additional fees for asset management services that add up to over five hours annually.

Under Option 1:

• All customers would be either better or no worse off in real terms (after adjusting for inflation).
• Around 25% of customers would obtain a significant fee reduction of over $200 per year.
• Customers with higher asset values would benefit due to reductions in personal financial administration and asset management fees.

Under Option 2:

• More than 97% of customers would be either better off or no worse off in real terms (after adjusting for inflation).
• Around 216 customers would pay higher fees. These are mostly personal financial administration level 2 customers (residing in aged care and hospitals). For around 175 of these customers, the fee increase would be less than $200 a year (after accounting for any fee rebate).
• As with Option 1, customers with higher asset values would benefit due to reductions in personal financial administration and asset management fees.

Right now, we only recover around 60% of the cost to deliver our services, which is not sustainable.

The proposed fees and charges reform would help QPT to keep supporting Queenslanders who need it most, while ensuring the long-term viability of the service.

• Any fee changes approved would only apply to deceased estate administration starting after the changes are implemented. Estates under administration at the time of implementation would not be affected.
• If the preferred option is approved, QPT’s fees would remain among the lowest in the market.
• Most customers with estates valued over $300,000 would pay more in fees under Option 1. Nearly all customers would pay more in fees under Option 2.
• Despite the broader fee increase, Option 2 would result in a fairer system for all customers as fees would be more closely aligned to the cost of services provided.

The proposed fees and charges reforms for trust administration services seeks to:

• Ensure that trust customers pay no more in fees than what it cost QPT to provide the service
• Make things easier to understand with a simpler fee structure
• Better balance financial sustainability while fulfilling social responsibility.

QPT is seeking to avoid acting as a trustee for low-value trusts if the customer's desired outcome can be achieved in a different way that would benefit them more.

• Under both options, QPT’s fees would remain among the lowest in the market.
• The proposed fee options would impact customers differently based on their trust type and value.
• Minors trusts would benefit from lower fees under both options.
• Most other trusts would see some increase compared to current fees. For trusts valued under $500,000, Option 1 typically offers lower fees than Option 2.

Financial management services

The proposed reform would result in a significant reduction in QPT’s annual revenue, in the order of $8.9m under Option 1 and $7.9m under Option 2.

QPT could not sustain such a reduction in revenue for an extended period and maintain critical frontline services. Therefore, if changes are approved, the implementation of the proposed reform would require the identification of additional revenue from another source.

Deceased estate administration

Option 2, which is the preferred option, would result in QPT operating a more sustainable service. It is anticipated to recover more than 90% of the service costs. Option 1 is expected to improve cost recovery to only 70%.

Trust administration

The proposed reform is anticipated to slightly improve QPT’s financial sustainability. The need to continue providing significant rebates for minors trusts limits QPT’s ability to substantially increase cost recovery.

QPT offers a broad range of services to diverse customer groups. Seeking to reform all fees at once presents significant challenges. That is why we are focusing our initial reform efforts on key services, which represents a significant portion of our operations and impacts a large number of customers.

We believe this targeted approach allows for more focused public consultation, ensuring we gather valuable feedback. If changes are approved by Queensland Government, reforms can be implemented that effectively address the needs of both QPT and our customers.

QPT has listened to its stakeholders and the community about the current fees and charges system and through a careful and deliberative process developed options for reform that would result in a contemporary fee structure.

Community consultation is an integral part of this process, which will deliver evidence informed reform that has had regard to customer outcomes, and QPT's financial sustainability given rising costs and community expectations.

Ahead of the current fees and charges reform, we put in steps to ensure our fees are reviewed more regularly in the future via our Public Trustee Fees and Charges Integrity and Governance Framework. The framework outlines our commitment to undertake regular reviews of our fixed fees and charges in the future including:

• Annual reviews
• A rolling benchmarking program on a three-year cycle
• A comprehensive review conducted at least once every five years.

We are following government processes, including undertaking public consultation to obtain your feedback to help make the best decisions on how fees and charges could be changed.

If approved, financial management fee changes could be implemented in early 2025.

Trust and deceased estate fees could be implemented within 12-to-18-months following a decision.

This will give customers time to obtain services elsewhere. For example, with deceased estates, customers who have nominated QPT as their executor will have the opportunity to change their Will if they wish to nominate a different executor.

We will provide an update on the timing of any fee changes including notifying customers who may be impacted.