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What Is Personal Advice and When Does It Trigger the SoA Obligation?
- Eloise Somerford
- Jun 21
- 3 min read
The SoA obligation does not apply to every financial conversation. It is triggered specifically by personal advice given to a retail client. That means classifying advice as personal or general is one of the most consequential decisions in financial services practice -- and one of the most commonly misunderstood.
The statutory definition
Section 766B of the Corporations Act defines personal advice as advice where the providing entity has considered one or more of the client's objectives, financial situation and needs, or where a reasonable person might expect the providing entity to have considered those matters.
Two limbs. Either one is enough to make the advice personal.
The first limb: what you actually considered
The first limb is subjective. If you actually took into account the client's objectives, financial situation or needs when forming your advice, it is personal advice. This applies regardless of whether you intended to personalise the advice, and regardless of what you told the client.
The second limb: what a reasonable person would expect
The second limb is objective ... and this is where practices most often get caught out. Even if you did not consciously consider the client's circumstances, the advice is personal if a reasonable person in those circumstances would expect you to have done so.
Factors that tend to indicate a reasonable person would expect personalisation:
The client is known to the practice and their personal circumstances are on file.
The interaction is one-on-one rather than in a group or broadcast setting.
Questions about the client's situation were asked as part of the conversation.
The advice involves a specific product recommendation rather than general product information.
The advice is framed in terms of what would suit the client, rather than what the product does.
What general advice looks like
General advice is advice where the providing entity has not considered the client's personal circumstances and where a reasonable person would not expect them to have done so. Common examples include:
Market commentary published on a financial services website open to the public.
Product information provided at a seminar to a broad audience.
Fact-based responses to questions about how a product works, without reference to the client's situation.
Research reports and ratings available equally to all subscribers.
Where general advice is given, a general advice warning is required under s949A. No SoA is needed. But the classification must genuinely reflect what occurred in the interaction.
Where practices go wrong
The most common error is applying a general advice label to what is, in substance, personal advice.
This typically happens in three ways:
A known client asks about a specific product in a one-on-one meeting, and the adviser responds with a recommendation framed as general information.
A phone or email response to a client query constitutes personal advice but is not recognised as such because no formal meeting took place.
A practice characterises advice as general to avoid SoA preparation obligations, even though the client's circumstances were implicitly factored in.
Each of these scenarios involves advice that is personal in substance. Describing it differently does not change the classification under the Corporations Act.
Why the distinction matters
The classification of advice as personal or general determines:
Whether an SoA must be given.
Whether the best interests duty under s961B applies.
Whether the appropriateness obligation under s961G applies.
The nature of the warnings that must be given to the client.
Where advice was personal in substance but classified as general, the client was not given the protections they were entitled to, and the providing entity failed to comply with its statutory obligations. That is not a paperwork issue - it is a substantive breach with real consequences for advisers and licensees.
Not sure if your SoAs are compliant?
RegiReview assesses your advice documents against current requirements and gives you a clear picture of where the gaps are and what to do about them.
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