In 2026, financial advisers must comply with the personal advice obligations in the Corporations Act, including acting in the client’s best interests, providing appropriate advice, warning where advice is incomplete, and prioritising the client’s interests. Advisers must also meet disclosure, conduct and professional standards as authorised representatives of an AFS licensee.
Expanded Answer
Financial advisers are personally subject to the statutory best interests duty and related obligations when providing personal advice. This includes taking reasonable steps to act in the client’s best interests, ensuring advice is appropriate to the client’s circumstances, warning if advice is based on incomplete or inaccurate information, and prioritising the client’s interests where conflicts arise. These obligations sit alongside broader conduct requirements, including acting efficiently, honestly and fairly as a representative of an AFS licensee.
In practice, this requires advisers to demonstrate a clear link between client objectives, the scope of advice, the strategy developed, and the recommendations made. Advisers must also meet disclosure obligations, including providing clear and effective explanations of advice, fees, risks and limitations. Professional standards, including ethical conduct, competence and ongoing education, remain central to compliance expectations.
Risk increases where advice is templated, poorly scoped, or not clearly aligned to client circumstances. Weak file notes, unclear reasoning, or failure to explain limitations are common failure points. While licensees are responsible for systems and supervision, advisers must be able to evidence their own compliance with advice and conduct obligations. See Standard 5: best interests and appropriateness and How do clear goals strengthen best interest decision-making?.
Why it matters
ASIC focuses heavily on advice quality and whether advisers can demonstrate compliance with best interests and related duties. Failures can lead to enforcement action, banning outcomes and broader scrutiny of licensee supervision and governance.
Practical guidance
- Define and document the scope of the advice, ensuring it aligns with the client’s objectives and circumstances.
- Evidence the reasoning behind recommendations, including alternatives considered and risks explained.
- Ensure disclosures are clear, specific and reflect the actual advice and client situation.
Further reading