Hi James,
Thank you for your question.
As a general rule, a Statement of Advice (SOA) needs to be provided when, or as soon as practicable after, personal financial product advice is given to a client.
There is an exception to the requirement to provide an SOA in section 946B (as modified by the regulations) of the Corporations Act. In some circumstances, advisers do not need to provide an SOA when giving further advice. Instead, less stringent disclosure requirements apply and a Record of Advice (ROA) must be kept. In short, this can be done where:
- The client has previously been provided with an SOA;
- The client’s relevant personal circumstances in relation to the further advice are not significantly different from the basis on which the previous advice was given; and
- The basis on which the further advice is given is not significantly different from the basis on which the previous advice was given (so far as it relates to other matters).
More detail about information that needs to be provided in an ROA can be found in the ‘Obligations that apply to further advice’ section of ASIC’s Regulatory Guide 175 – ‘Licensing: Financial product advisers – Conduct and disclosure’.
From your post, we understand that:
- You have provided your client with an SOA which recommended that the client apply for Life, TPD and IP policies;
- The insurance applications were declined due to a back condition which the client did not mention to you before you provided the original advice;
- You would now like to amend the original advice and recommend new products. Your recommendation will now take into account the client’s back condition.
As the further advice you are planning to give your client will take into account their back condition, this is likely to constitute a ‘significant difference’ in both their personal circumstances, and the basis upon which the advice is given. Therefore, a new, updated, SOA should be provided.
This new SOA can incorporate, by reference, information in the old SOA. See this article we wrote (it is old but still accurate).
Please feel free to contact our financial services team if you require further assistance.
Authors: Paul Derham (Partner), Laura Sullivan (Lawyer) and Nicolette Tan (Legal Clerk)
