Types of financial product advice

The obligations that apply when you give financial product advice are different depending on whether you are providing personal advice or general advice and whether the client is a retail or wholesale client.

• Personal advice is where the person giving the financial product advice has considered one or more of the client’s objectives, financial situation and needs, or a reasonable person might expect the person giving the advice to have considered these matters. All other financial product advice is general advice.
• Factual information is objectively ascertainable information, the truth or accuracy of which cannot reasonably be questioned. Good quality factual information can often be useful for clients wishing to better understand the financial products or strategies available to them. You do not need to hold an AFS licence to give factual information to clients.
• Clients will be retail clients unless they satisfy one of the requirements to be a wholesale client. See Regulatory Guide 175 AFS licensing: Financial product advisers—Conduct and disclosure (RG 175) for who is a retail client.

Limited advice

Limited advice is personal advice that does not cover all possible topics relevant to the client. Limited advice is also known as scaled, single-issue, narrow-scope, modular, piece-by-piece or episodic advice.

The same rules apply to all personal advice on a particular topic, regardless of whether the advice is either limited or more comprehensive in scope.

For more information, see:

• Information Sheet 267 Tips for giving limited advice (INFO 267).
• Regulatory Guide 244 Giving information, general advice and scaled advice (RG 244)

Digital advice

Digital advice (also known as robo-advice or automated advice) is the provision of automated financial product advice using algorithms and technology and without the direct involvement of a human adviser.

ASIC has provided guidance in Regulatory Guide 255 Providing digital financial product advice to retail clients (RG 255), which brings together some of the issues that persons providing digital advice to retail clients need to consider when operating in Australia—from the licensing stage (i.e. obtaining an AFS licence) through to the actual provision of advice.