Client Advice Records (CARs)

How DBFO reforms are reshaping advice documentation

What is a Client Advice Record?

A Client Advice Record (CAR) is a new form of advice documentation introduced under the DBFO reforms. Designed to be simpler and more principles-based than traditional SOAs, CARs focus on clear communication of the advice, its basis, and associated costs without the rigid structure of a full SOA.

CAR vs SOA

While a full SOA must include extensive prescribed content under RG 175, a CAR is intended to be more streamlined. However, it must still evidence compliance with the best interests duty and appropriate advice obligation. AdviserCheck architecture is document-type-agnostic, meaning it can analyse CARs using the same compliance framework.

Transition Period

The transition to mandatory CARs is ongoing, with ASIC providing updated guidance through INFO 291 and other regulatory instruments. Advisers should stay current with DBFO developments as the documentation requirements evolve.

Compliance Implications

Regardless of the document format SOA or CAR the underlying compliance obligations remain the same. The best interests duty, appropriate advice duty, and fee disclosure requirements apply equally. AdviserCheck checks documents against these obligations, not against a specific template format.

What Is a Client Advice Record?

A Client Advice Record (CAR) is a document that records personal advice provided to a retail client. Under the DBFO reforms, CARs can be used as an alternative to full SOAs for certain types of advice, particularly where the advice is straightforward or where the client has an established relationship with the adviser. The CAR must contain all the information required by the Corporations Act, including the advice, the basis for the advice, fees, and conflicts of interest.

CARs are typically shorter and more focused than SOAs, making them more accessible to clients. They are designed to record the key elements of the advice conversation rather than reproducing every detail of the advice process. However, CARs must still comply with all relevant regulatory requirements and must provide sufficient information for the client to make an informed decision.

When to Use a CAR vs an SOA

The DBFO reforms expanded the circumstances in which CARs can be used. Generally, a CAR can be used when: the advice is provided as part of an ongoing advice relationship, the advice is within the scope previously agreed with the client, and the client has received a full SOA within the last 12 months. CARs are particularly suitable for periodic reviews, strategy adjustments, and recommendations consistent with the client's established financial plan.

A full SOA is still required for: initial advice (first-time clients), advice that involves a significant change in strategy, advice outside the previously agreed scope, complex advice involving multiple products or strategies, and any situation where the client requests a full SOA. Advisers must carefully determine which document is appropriate for each advice occasion.

CAR Record-Keeping Requirements

Under the Corporations Act, CARs (like SOAs) must be retained by the licensee for at least 7 years from the date the advice was provided. The records must be stored securely and be accessible for compliance monitoring and audit purposes. CARs should be indexed and retrievable by client name, adviser, and date.

Licensees should implement systems and processes to ensure CARs are: properly prepared and reviewed before being provided to clients, provided to clients within the required timeframe, accurately recorded in the client management system, securely stored with appropriate access controls, and available for inspection by ASIC or the AFSL auditor on request.

Frequently Asked Questions

Can a CAR replace an SOA for all advice?
No. CARs are suitable for certain types of advice, particularly ongoing advice within an established client relationship. Full SOAs are still required for initial advice, complex advice, and advice outside the agreed scope.

What information must a CAR contain?
A CAR must contain: the advice provided, the basis for the advice, fees and costs, any conflicts of interest, and relevant warnings. The specific content requirements are set out in the Corporations Act and depend on the type of advice.

How long must CARs be retained?
CARs must be retained for at least 7 years from the date the advice was provided. This applies to both the licensee and, where applicable, the adviser. Failure to retain records can result in compliance issues during audits.

Do clients have a right to request a full SOA instead of a CAR?
Yes. If a client requests a full SOA, the adviser must provide one. Clients who prefer the detailed format of a full SOA or who need comprehensive documentation for their records should request one from their adviser.

Regulatory Context

Consumers evaluating advice documents benefit from knowing the recent timeline. Since FOFA took effect in 2013, advisers have owed a best interests duty and been barred from conflicted remuneration. The DBFO reforms, phased through 2024-25, removed the Fee Disclosure Statement and simplified ongoing fee consents while clarifying how advice fees can be deducted from super. Further change is queued: the Quality of Advice Review’s proposals for simpler SOAs and a new adviser class were progressing through draft Tranche 2 legislation as of March 2025.