Your Rights When Receiving Limited or Scoped Financial Advice

What Is Limited or Scoped Advice?

Limited or scoped financial advice focuses on a single issue or a specific area of your finances — for example, asking your adviser whether to consolidate your super accounts or how much insurance you need. It does not require a full comprehensive review of your entire financial situation. The advice is typically documented in a Record of Advice (ROA), which is shorter and less detailed than a full Statement of Advice.

Your Rights Still Apply

Even with limited advice, your adviser must still comply with key legal obligations. The best interests duty (s961B) and the appropriate advice duty (s961G) still apply, but only within the scope of the advice you requested. Your adviser must still provide a document that clearly states the scope of the advice, the recommendation, the basis for it, and all associated fees. You also retain the right to complain to the licensee or AFCA if you are not satisfied.

What the Document Must Include

A Record of Advice for limited advice must clearly state the scope — what was covered and what was not. It must include the recommendation, the basis for it, any fees or costs associated with either the advice or the recommended products, and any relevant product disclosures. If the adviser could not consider parts of your financial situation because of the limited scope, this should be clearly stated.

When to Ask for a Full SOA

If your adviser recommends significant changes that affect multiple areas of your finances — even within a limited engagement — you may be entitled to a full Statement of Advice. If the document feels too brief or does not adequately explain the reasoning behind the recommendation, ask your adviser whether a SOA would be more appropriate. You can also use an independent compliance check to assess whether the documentation matches the scope of the advice.

What Is Limited or Scoped Advice?

Limited or scoped advice (also called single-issue advice) is financial advice that covers a specific area of your financial life rather than your entire financial situation. For example, you might seek limited advice about consolidating your super accounts, whether to buy life insurance, or how to invest a redundancy payment — without needing a full review of all your finances.

The scope of advice must be agreed in writing with your adviser before any personal advice is provided. This is usually documented in a Financial Services Guide (FSG) or a scope of advice document. The adviser cannot provide advice outside the agreed scope without your consent. If during the process they identify issues outside the scope that need attention, they must inform you and seek your agreement to expand the scope.

Your Rights with Limited Advice

Even with limited advice, your adviser must comply with the best interests duty (s961B) within the agreed scope. This means they must still make reasonable inquiries about the relevant aspects of your financial situation, conduct a reasonable investigation into available products within the scope, and base all judgements on your personal circumstances. They cannot simply provide generic recommendations.

You also have the right to: understand what is included and excluded from the scope before any advice is given, receive a compliant Statement of Advice (or Record of Advice) for the limited advice provided, ask questions about the recommendations, and request that the scope be expanded if you feel important areas are being neglected. If your adviser refuses reasonable requests to expand the scope, you can seek a second opinion from another adviser.

When Limited Advice Makes Sense

Limited advice can be an excellent option when you have a specific financial question and do not need or want a comprehensive financial plan. It is typically faster and cheaper than full advice. Common situations include: whether to increase super contributions, how to allocate a redundancy payment, whether salary sacrificing is beneficial, or how to structure insurance cover.

However, limited advice has limitations. The adviser may not identify issues outside the scope that could materially affect the outcome of their recommendations. For example, advice about consolidating super may not consider your insurance arrangements through the existing fund. If you have a complex financial situation, comprehensive advice may be more appropriate despite the higher cost.

Frequently Asked Questions

How much does limited advice typically cost?
Limited advice costs vary widely depending on complexity, but are generally lower than comprehensive advice. Fees can range from $500 to $3,000 for a simple scoped advice question, compared to $3,000-$8,000+ for comprehensive advice. Some super funds offer low-cost limited advice to members ($200-$500) through digital advice or phone-based services.

Do I get a Statement of Advice for limited advice?
Yes. Even for limited advice, you must receive a Statement of Advice (or Record of Advice) that documents the recommendations and the basis on which they were made. The SOA for limited advice will be shorter than a comprehensive SOA but must still meet the legal requirements under the Corporations Act.

Can I convert limited advice to comprehensive advice later?
Yes. If after receiving limited advice you decide you want a full financial plan, your adviser can expand the scope with your agreement. The limited advice SOA may be incorporated into the comprehensive SOA, avoiding duplication. Your adviser should tell you the additional cost before proceeding.

What if my financial situation is more complex than I thought?
If during the limited advice process it becomes clear that your situation is more complex than initially understood, your adviser should discuss this with you and recommend expanding the scope. You have the right to decide whether to proceed with comprehensive advice or to continue with the original limited scope and accept the limitations.

AFCA Complaints — What to Know

If you have a dispute with your financial adviser, AFCA provides free independent dispute resolution. In 2023-24, AFCA received 3,559 complaints about investments and advice. The most common issues were inappropriate advice, fees disputes, and poor disclosure. AFCA can award compensation of up to $1 million (with a $5.36 million cap for superannuation complaints). Complaints must be lodged within 6 years of the issue arising.