What is advice?
When a Surety Life advisor provides personal advice they consider:
- your personal and financial position.
- your financial objectives.
You will also be provided with a written recommendations on how we researched products and strategy to meet your objectives.
You are also made aware of any gaps within the strategy and products being recommended.
The advisor will assist you in avoiding the pitfalls ensuring you are comfortable with the recommendations prior to implementation.
Summary from Australian Financial Review article
“Personal advice” takes into account a consumer’s personal circumstances, such as their financial situation, objectives and needs. In contrast, “general advice” is not tailored to any of the consumer’s personal circumstances. The classification is important because personal advice creates a legal obligation for the adviser to act in the customer’s best interest and issue a statement of advice; if the advice is “general”, there is no such duty.
ASIC report/findings summary below
This report sets out the findings from research we commissioned into consumer awareness and understanding of the differences between ‘general’ and ‘personal’ advice. Under the current regulatory framework for financial advice:
personal advice is advice that takes into account one or more relevant aspects of the consumer’s personal circumstances, such as their financial objectives, situation and needs, or is given in circumstances where a reasonable person would expect that their individual circumstances have been taken into account general advice is not tailored to any of the consumer’s personal circumstances, nor would a reasonable person perceive it to be tailored to the consumer’s personal circumstances.
The distinction between personal and general advice is important because the level of consumer protection afforded to consumers who receive advice differs significantly, depending on whether the advice they receive is personal or general.
When personal advice is provided to a retail client, a number of important consumer protection obligations apply – such as the obligations to act in the consumer’s best interests, to give priority to the interests of the consumer and to provide a Statement of Advice that sets out the advice and the basis of the advice. In contrast, consumers receiving general advice are afforded minimal consumer protections.
When general advice is provided to a retail client, a warning must be given that the advice does not take into account the consumer’s personal circumstances and, therefore, the consumer should consider whether the advice is appropriate for them before acting on it. The provider of general advice is not required to act in the consumer’s best interests or to give priority to the interests of the consumer.