Buy Life Insurance · the kinds of life cover
Schedule item 6 of 6
General advice, personal advice and plain information
General advice is a recommendation or opinion about a financial product that doesn’t consider your personal circumstances; personal advice is tailored to your objectives, financial situation and needs, and its provider must act in your best interest. Financial advisers who give personal advice on life insurance must appear on the financial advisers register, which you can search yourself.
General information, not advice. This page explains how things work in general; it doesn’t consider your circumstances and isn’t financial, tax or legal advice. Check the official guidance on ASIC’s Moneysmart and read the product disclosure statement for any policy.
Three kinds of help, side by side
| Financial information | General advice | Personal advice | |
|---|---|---|---|
| What it is | Facts about products, services and strategies | A recommendation or opinion about a product | A recommendation or opinion tailored to you |
| Considers your circumstances | No | No | Yes: income, expenses, assets, liabilities, goals, risk tolerance |
| Licence | Not needed for factual information | Most providers must hold an AFS licence | Must hold an AFS licence, or be authorised by a licensee |
| What you receive | Information, sometimes calculators | A warning that it is general; in some cases a PDS | Usually a Statement of Advice for the first advice on a topic |
| Cost | Usually free | Usually free | Usually paid |
A page like this one is financial information. The difference matters with life insurance because the same conversation can sound like advice without being personal advice at all.
Recognising general advice
Moneysmart says you may be getting general advice if you weren’t asked about your financial situation, needs and objectives, or if the person will speak about a product generally rather than recommend it for you. When general advice is given, the provider must warn you: they will tell you it doesn’t take account of your objectives, financial situation or needs, prompt you to consider whether it is appropriate for you before acting, and in some cases give you a PDS.
General advice has its uses. Moneysmart mentions comparing or confirming your understanding of products, researching a topic, or not wanting to pay for tailored advice. What it can’t do, in Moneysmart’s words, is “tell you how to make the best financial decision for your personal situation.”
What personal advice involves
Personal advice can be simple single-issue advice, comprehensive advice that builds a plan covering insurance among other things, or ongoing advice with regular reviews. Moneysmart gives an example that fits life insurance closely: wanting income protection while having health issues. Generally the first personal advice on a topic is set out in a Statement of Advice, whether it is given face to face, by phone or video, or digitally.
Moneysmart suggests reading an adviser’s Financial Services Guide (FSG), which explains their services, fees and any links to financial products, and asking about commissions, how they choose products, how they handle complaints and how to end the arrangement.
Checking an adviser on the register
Moneysmart hosts the financial advisers register, a register of people who give personal advice on investments, superannuation and life insurance. Moneysmart states the rule plainly: an adviser who is not on the register cannot legally provide you with personal advice on investments, superannuation and life insurance.
- Search. By name, number or ABN, or by suburb or postcode. A postcode search returns results in random order.
- Read the entry. Where the adviser has worked, their qualifications and training, professional memberships, and the product types they can advise on.
- Look for disciplinary actions. The register must show bannings, disqualifications, enforceable undertakings, and certain orders and directions by the Financial Services and Credit Panel.
- Check further back. Advisers banned or disqualified, or who entered an enforceable undertaking, before 31 March 2015 who have not re-entered the industry are not on this register; they are on ASIC’s Banned or Disqualified Register or Enforceable Undertakings Register.
- Check the licensee. A properly operating adviser holds an Australian Financial Services licence or is authorised by a business that does; you can check the licensee’s name on ASIC’s professional registers search.
Two cautions from Moneysmart. ASIC does not check the information before it goes on the register; licensees are responsible for it and must update it within 30 business days of a change. And ASIC does not endorse or recommend financial advisers.
A word about online quizzes
Moneysmart warns that clicking an advertisement, doing an online quiz or handing over your details can put you on a lead generation list, marking you as a sales target for financial advice or super, and that ASIC is concerned some lead generation practices may expose people to a risk of significant losses.
If money is already tight, Moneysmart points to financial counselling: a free, confidential service from not-for-profit organisations that helps with budgeting and creditors, without giving product advice.