What Are ASIC's Expectations for SoA Compliance?

Meeting the minimum content requirements of the Corporations Act is not the same as meeting ASIC's expectations. ASIC's approach to SoA compliance - set out in Regulatory Guide 175 and evidenced in various ASIC publications - consistently applies a higher bar than the statutory floor.

Understanding what ASIC actually expects - and where it focuses its scrutiny - is essential for advisers and licensees who want their SoAs to survive audit. This article explains ASIC's compliance framework, the key expectations in RG 175, and what the most recent update to that guidance changed.

RG 175: ASIC's Primary Guidance on SoA Compliance

Regulatory Guide 175 - Licensing: Financial product advisers - Conduct and disclosure - is ASIC's core guidance document for financial advice compliance. It was substantially updated in November 2024 and remains the primary reference for how ASIC interprets and applies the obligations in the Corporations Act.

RG 175 is not law - but it is the clearest available guide to how ASIC will assess compliance in practice. An SoA that satisfies the RG 175 guidance will almost always satisfy the underlying legal obligations. An SoA that meets the statutory minimums but falls short of RG 175's guidance is at material risk of a finding.

ASIC's Key Expectations Beyond the Statutory Minimum

RG 175 identifies a series of expectations that go beyond simply completing the mandatory elements in s947B and s947C. The following are the areas where ASIC consistently applies its higher bar.

Substance over process

Completing the seven safe harbour steps in s961B(2) satisfies the process requirement. But the SoA must show that those steps were completed with genuine analysis applied to this client's actual circumstances. Process without substance is not compliance.

Client specificity

ASIC has repeatedly flagged SoAs that contain boilerplate language - goal statements that could apply to any client, risk disclosures that are identical across all SoAs produced by a practice, and basis for advice sections that describe the product or strategy generally rather than explaining why it is appropriate for this client. The expectation is that every client-facing element of the SoA reflects the circumstances of the individual client it is for.

Appropriateness as a separate analysis

Best interests (s961B) and appropriateness (s961G) are separate obligations and ASIC expects them to be separately addressed. An adviser can satisfy every step of the best interests safe harbour and still give advice that is not appropriate to the client's circumstances. The SoA must demonstrate both, and they should not be collapsed into a single statement about the advice being in the client's best interests.

Product suitability reasoning

Where a specific product is recommended, ASIC expects the SoA to explain why that product - not just why a product of that type. This does not require exhaustive product comparisons in every case, but the reasoning behind the product selection should be visible and connected to the client's circumstances.

Tailored risk disclosure

Generic risk disclaimers - "investments can go up and down", "past performance is not an indicator of future returns" - are not adequate. ASIC expects risk disclosure to be specific to the products recommended and to the client's circumstances, including their capacity to absorb the risks being taken.

What ASIC Publications Reveal

ASIC's published reports and enforcement actions on financial advice quality are a reliable guide to where the regulator focuses its scrutiny. Some of the patterns that have emerged in recent years are:

• Best interests duty failures: advice not demonstrably in the client's best interests, even where the process was followed;

• Inadequate needs analysis: client objectives and financial situation not properly identified or documented;

• Inappropriate advice: recommendations that, on the facts in the SoA, are not appropriate to the client's circumstances under s961G;

• Conflicted remuneration: incomplete disclosure of benefits received, or advice shaped by remuneration structures rather than client interests; and

• Insurance switching without full s947D disclosure: charges and lost benefits from product replacement not documented.

What the November 2024 RG 175 Update Changed

The November 2024 update to RG 175 was a significant revision. Key changes relevant to SoA compliance include:

• Strengthened guidance on the best interests duty and the obligation to prioritise client interests, with clearer articulation of the standard ASIC expects beyond the safe harbour steps;

• Updated guidance on scaled advice, clarifying when limiting the scope of advice is appropriate and what must be disclosed when scope is limited;

• Revised guidance on digital advice and technology-assisted advice processes, including expectations for automated fact-finding and advice generation; and

• More explicit guidance on what ASIC considers inadequate disclosure - including specific examples of disclosure language that does and does not meet the standard.

The Reform Environment

The government's Delivering Better Financial Outcomes (DBFO) Tranche 2 proposals include replacing the SoA with a principles-based Client Advice Record (CAR). As of mid-2026, this legislation has not been enacted. The current SoA framework under the Corporations Act continues to apply in full, and ASIC continues to assess compliance against the existing regime.

Advisers should not treat the prospect of future reform as a reason to ease up on current SoA compliance obligations. ASIC has given no indication that its enforcement approach will soften in the period before any new regime takes effect.

Do your SoAs meet ASIC's expectations - not just the statutory floor?

RegiReview reviews SoA documents against RG 175 guidance and ASIC's current compliance expectations - not just the mandatory content checklist - so you know where you stand before a surveillance review does.

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