ASIC releases limited advice guidance

Financial advisers giving limited advice will need to explain what advice is provided and what is not provided to meet best interests duty, according to the corporate regulator.

The Australian Securities and Investments Commission (ASIC) has released an information sheet on limited advice an example statement of advice (SoA).

ASIC commissioner, Danielle Press, said the regulator understood the industry faced some barriers to providing limited advice, including a lack of clarity about the regulatory requirements.

Related News:

“We expect this guidance will provide regulatory certainty to industry and help reduce compliance costs. It will assist financial advisers in their efforts to make these forms of advice more available to consumers and assist them in delivering quality advice in a timely, affordable, and compliant manner,” she said.

The information sheet said when giving limited advice, advisers needed to clearly communicate the advice they were providing and the advice they were not providing, along with the implications of this.

“For example, when giving limited advice, it should be very clear in your SoA (if you are required to give one) what advice you have provided and what advice you have not provided, the implications of this, and why you have taken this approach,” it said.

“We consider that limited advice will be unlikely to meet the best interests duty and related obligations if the client does not understand any of the significant limitations or qualifications that apply to it.

“Clear communication can help you to be satisfied that the client understands your advice, and the benefits, costs and risks of the financial products you recommend: see Standard 5 of the Code of Ethics.”

ASIC’s tips for providing limited advice included:

  • Identifying the client’s reasons for seeking advice by asking open-ended questions;
  • Putting your client first by declining to provide advice and referring your client elsewhere if you cannot act in the client's best interests when scoping the advice;
  • Addressing advice topics that fall outside the scope of the advice;
  • Making inquiries;
  • Revising the subject matter of advice;
  • Making inquiries to obtain complete and accurate information;
  • Using processes and systems for scoping advice;
  • Designing advice processes to ensure advice strategies come first; and
  • Keeping records.

Recommended for you




Yep good ol Ms Press with her useless ASIC guidance’s.
ASIC yet again prove they have zero idea of the Real world of Advice & clients needs.
ASIC have left Advisers hanging yet again as it is near impossible and time wastingly expensive to clarify EVERY possible piece of Advice not provided in limited Advice. And detail the risks, the implications of this, and why you have taken this approach.
ASIC are leaving an infinite list of unadvised issues that can be used to kill the Adviser any time something goes wrong.
ASIC, Ms Press you either intentionally are leaving Advisers massively exposed so you can continue to easily kill them.
Or you are just so out of touch with reality.
When we see a Dr or a Lawyer, do they have to explain every thing possible they have not done for us and explain the risk and implications of not addressing ALL the other possible issues. Of course not !!!!
Off the planet Ms Press & ASIC, so far from reality as per usual.

It is true that product providers can still provide advice, related to maintain or selling more of their own product, without all this mess - and charge a fee to all members for said service/advice even if the member never uses the service/advice, no opt in, no FDS?
Seems to me ASIC knows exactly what they are doing - but could be wrong.

Yeah pretty much. Nothing to see here. No problems. Carry on.

I am reading the ASIC statement above. Can anyone give me an example of "limited advice" that does not require an SOA?

Yep - when you give further advice. Are you an adviser? this is financial planning 101.

You maybe correct. In my mind, I was thinking that would be an ROA and in a different category than limited advice.

All ASIC is saying IF you have to give an SoA (you decide if you do or not). If you gave a comprehensive SoA on day 1, which included super and other advice, and you now want to give 'limited further advice' about the super component of the original advice - you do not need an SoA for that (it would be a record of the advice given and the client does not have to be given any document at all).


Another band-aid solution on top of bad legislation. For a few years I thought ASIC just hated Advisers and after reading the sample, now I am convinced they're clueless, and just live in fairy land. Perhaps it's both clueless and haters. This dosen't make things easier at all, it makes it harder. They use terms such as "Use your professional judgement ". I don't think in licensee land the words "use your professional judgement" is even allowed. The next time your Auditor states there's a spelling mistake and therefore the SOA does not meet best interest obligations I'll say "i used my professional judgement" . It seems they work in isolation of reality, AFCA cases, license standards, PI Cover requirements, and dozens of other Government bodies.

Just read their guidance document. It’s a limited scope risk insurance SoA… this little nugget of gold made me laugh:

“ The policies with XYZ Insurance are cheaper than increasing your existing policies through SuperABC Insurance. XYZ Insurance has no inferior features or benefits.”

So yeah it’s limited advice but please make sure, in your working papers, you’ve read two PDS’ cover to cover and can guarantee the client won’t lose a singe benefit.

How about ASIC mandate simple PDS’ on the back of this. 5 pages TOPS for all products.

Hats off to you life insurance advisers, you know your onions and it’s an embarrassment that they use risk advice AGAIN as their example. Give us a decent example of super switching eh?!

Yep, there's a lot of work and compliance risk involved in this case study for $1,423 commission after GST, which also needs to cover application and underwriting assistance costs, and is subject to a two year clawback. No wonder so many advisers are giving up on insurance advice.

The chances of this hypothetical client paying the true cost of advice and implementation assistance as an extra upfront fee are pretty much zero, even if it does reduce their premium by 25% or so.

Wonder what the cost was for ASIC to produce this SOA?

I didn't know there were any insurance advisers left? Didn't LIF and FASEA kill them all off?

Have you heard the joke about Risk Writers, Yettie's, the lockness monster and UFO's and what they all have in common? ...... They're often talked about but never really seen.

Limited advice guidelines look exactly like full advice guidelines, so I don't understand what ASIC thinks this is achieving.

Dear ASIC. You cannot fix this problem with one of your RG releases. Remember it's RG146 that got us into this position in the first place. Your so called "Guidance" is exactly that: Guidance. Your interpretation, not what the law or ethics or professionalism require of us. Lucky most of us can work things out without your help, which is no help at all. I've done a quick calculation and doing a full advice SoA would actually take us less time than a limited SoA based on your logic. Thanks but no thanks. Sincerely. A Real World Adviser

Hey ASIC - have you heard of FASEA standards?

Ha ha ha, this is gold. The financial planning profession is in crisis due largely to over regulation from ASIC, their meddling with FASEA and their interference with the Royal Commission. There is broad acknowledgment the pendulum has swung too far and regulation needs to be substantially reigned in to make advice more affordable. So what do ASIC do? They release guidance which will add more to the time it takes to construct a Statement of Advice!!!

ASIC is a rogue regulator. They are out of control.

Add new comment