Corporations Act 2001
For the purposes of this Chapter, financial product advice means a recommendation or a statement of opinion, or a report of either of those things, that:
(a) is intended to influence a person or persons in making a decision in relation to a particular financial product or class of financial products, or an interest in a particular financial product or class of financial products; or
(b) could reasonably be regarded as being intended to have such an influence.
However, subject to subsection (1B), the provision or giving of an exempt document or statement does not constitute the provision of financial product advice.
Subsection (1A) does not apply for the purpose of determining whether a recommendation or statement of opinion made by an outside expert, or a report of such a recommendation or statement of opinion, that is included in an exempt document or statement is financial product advice provided by the outside expert.
There are 2 types of financial product advice: personal advice and general advice.
For the purposes of this Chapter, personal advice is financial product advice that is given or directed to a person (including by electronic means) in circumstances where:
(a) the provider of the advice has considered one or more of the person's objectives, financial situation and needs (otherwise than for the purposes of compliance with the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 or with regulations, or AML/CTF Rules, under that Act); or
(b) a reasonable person might expect the provider to have considered one or more of those matters.
[ CCH Note : S 766B(3A) will be inserted by No 50 of 2019, s 3, Sch 1 [ 4] (effective 5 April 2021). S 766B(3A) will read:
However, the acts of asking for information solely to determine whether a person is in a target market (as defined in subsection 994A(1) ) for a financial product, and of informing the person of the result of that determination, do not, of themselves, constitute personal advice.]
For the purposes of this Chapter, general advice is financial product advice that is not personal advice.
The following advice is not financial product advice:
(a) advice given by a lawyer in his or her professional capacity, about matters of law, legal interpretation or the application of the law to any facts;
(b) except as may be prescribed by the regulations - any other advice given by a lawyer in the ordinary course of activities as a lawyer, that is reasonably regarded as a necessary part of those activities;
(c) except as may be prescribed by the regulations - advice given by a registered tax agent or BAS agent (within the meaning of the Tax Agent Services Act 2009 ), that is given in the ordinary course of activities as such an agent and that is reasonably regarded as a necessary part of those activities.
(a) in response to a request made by a person (the inquirer ) to another person (the provider ), the provider tells the inquirer the cost, or an estimate of the likely cost, of a financial product (for example, an insurance product); and
(b) that cost or estimate is worked out, or said by the provider to be worked out, by reference to a valuation of an item (for example, a house or car to which an insurance policy would relate), being a valuation that the provider suggests or recommends to the inquirer;
the acts of telling the inquirer the cost, or estimated cost, and suggesting or recommending the valuation, do not, of themselves, constitute the making of a recommendation (or the provision of any other kind of financial product advice) relating to the financial product.
(a) in response to a request made by a person (the inquirer ) to another person (the provider ), the provider tells the inquirer information about:
(i) the cost of a financial product; or
(ii) the rate of return on a financial product; or
(iii) any other matter identified in regulations made for the purposes of this subparagraph; and
(b) the request could also have been complied with (but was not also so complied with) by telling the inquirer equivalent information about one or more other financial products;
the act of telling the inquirer the information does not, of itself, constitute the making of a recommendation (or the provision of any other kind of financial product advice) in relation to the financial product referred to in paragraph (a).
Subsections (5), (6) and (7) are not intended to affect, in any way, the determination of whether situations not covered by those subsections do, or do not, constitute the provision of financial product advice.
In this section:
(a) a document prepared, or a statement given, in accordance with requirements of this Chapter, other than:
(i) a Statement of Advice; or
(ii) a document or statement of a kind prescribed by regulations made for the purposes of this subparagraph; or
(b) any other document or statement of a kind prescribed by regulations made for the purposes of this paragraph.
(a) the person by whom, or on whose behalf, the exempt document or statement was prepared; or
(b) an employee or director of that person.