Cooling-Off Rights After Financial Advice

When you can reverse a product recommendation and how refunds work

Which Products Carry Cooling-Off Rights

Under the Corporations Act, retail clients generally receive 14 days cooling-off for interests in managed investment schemes, superannuation products and investment life insurance, running from the earlier of confirmation of the transaction or the end of the fifth business day after issue. During this window you can cancel and receive a refund, adjusted for market movements, taxes and reasonable administration costs. Personal advice services themselves and listed securities bought on market are generally outside cooling-off — you cannot unwind the advice fee the same way, though fee consent rules under DBFO let you withhold ongoing-fee consent.

Your SOA should state the applicable rights for each recommended product, including who to contact, the deadline and any amounts that may be deducted. Where an adviser recommends switching super funds or commencing a pension, the new product's cooling-off runs separately from any exit applied to the old fund. If the SOA is silent on cooling-off, ask for the PDS references in writing before implementing — see our SOA guide and RG 175 requirements.

How to Exercise Your Rights

Write to the product issuer (not just your adviser) within the period, identifying the product, application date and instruction to cool off. Email with read receipt or the issuer's cancellation form both work; phone alone is risky. The issuer must refund within a reasonable period, typically with an adjusted amount reflecting market value changes plus any non-refundable tax or fees disclosed in the PDS. Keep the application, SOA recommendation, PDS cooling-off section and your cancellation as one bundle.

For advice-fee disputes rather than product cancellation — for example you signed an ongoing fee arrangement but received no service — use fee-consent withdrawal and IDR instead. Our ongoing-fee guide explains annual consent and opt-out, and RG 271 sets the 30-day IDR rule.

Advice Fees vs Product Refunds — Know the Split

A common misunderstanding is conflating the one-off SOA preparation fee ($2,000-$3,500 typical) with product refunds. The advice fee pays for analysis and documentation already delivered and is generally non-refundable once the SOA is provided, unless the licensee agrees otherwise or the fee was deducted without valid consent. Product refunds flow separately from issuers under PDS terms. Ongoing advice fees sit in between: from January 2025 DBFO consent rules, you must renew consent annually within 150 days of anniversary, and without renewal the arrangement terminates and deductions must stop. Use cooling-off for products and consent withdrawal plus IDR for fees — different letters, different recipients, different clocks.

Traps: Switching, Insurance and Super Pensions

Cooling off a replacement super interest does not automatically reinstate the old fund's insurance or pension terms — exited cover may require re-underwriting and lost pension account-based status may affect transfer-balance and deeming treatment. Life insurance outside super may carry different cancellation and refund terms to fund-held cover, including stepped premium already incurred. Your SOA's s947D replacement disclosure must address lost benefits, waiting periods and fee differences; absent analysis supports a complaint.

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Frequently Asked Questions

How long is cooling-off?
Generally 14 days from confirmation for managed investments, super interests and investment life products. Check the PDS — some issuers allow longer.

Do I get a full refund?
Usually the amount adjusted for market movements, taxes and disclosed admin costs — not always dollar-for-dollar. The PDS must state deductions.

Can I cool off the advice fee?
Advice service fees are generally not cooling-off products, but ongoing fees require your annual consent and can be stopped. Disputed one-off fees go through IDR then AFCA.

What if the SOA omitted cooling-off disclosure?
That may breach RG 175.130 disclosure and supports requesting an amended SOA plus an IDR complaint referencing the omission.