General advice vs personal advice: what's the difference and why it matters

Anyone who has read a financial product brochure or listened to a call centre representative has probably heard some version of a general advice warning without necessarily registering what it actually means. The distinction between general advice and personal advice is a specific legal one in Australia, and it has a real effect on how much you should rely on what you are being told.

General advice is a recommendation or opinion about a financial product or strategy that does not take into account your particular objectives, financial situation or needs. Because of that, anyone giving general advice is required to include a warning that it has not considered your personal circumstances. General advice can still be useful — it can help you understand how a type of product works or narrow down broad options — but it stops short of telling you whether a particular course of action is actually appropriate for your own situation.

Personal advice is different in a specific and meaningful way: it must be tailored to your objectives, financial situation and needs, and the provider must be able to explain why the recommendation is appropriate for you specifically. This is generally what a formal, written Statement of Advice is for, and it comes with a legislated best-interests duty on the part of the adviser. Providers of personal advice to retail clients on relevant financial products must be listed as an authorised individual on ASIC's Financial Advisers Register, which is one of the clearer practical differences between the two categories from a consumer's point of view.

Why this matters in practice comes down to how much of the assessment you are effectively doing yourself. If you act on general advice as though it were a tailored recommendation for your circumstances — for example, treating a comment that "this type of fund performs well" as though it were confirmation that the fund suits your specific situation — you are the one filling in that gap, not the person who gave the general advice. A phone call to a super fund's general call centre line is commonly general advice unless the conversation is specifically flagged otherwise, while sitting down with a planner who produces a written, documented plan based on your actual circumstances is the hallmark of personal advice.

The most reliable way to know which one you are getting is to ask directly — "is this general advice or personal advice" is a perfectly reasonable question to put to anyone discussing your finances with you. A genuine personal-advice engagement should reference your specific situation rather than speaking in generic terms, and should result in a written Statement of Advice rather than a verbal comment you are left to interpret on your own.

This article is general information only. It has been prepared without taking into account your individual objectives, financial situation or needs, and it is not personal financial advice. Before engaging any financial adviser, confirm they currently hold an Australian Financial Services Licence (AFSL) or are an authorised representative of an AFSL holder, using ASIC's Financial Advisers Register at moneysmart.gov.au. Our directory lists financial advisers and superannuation specialists across Australia by area if you are ready to start comparing your options.

Frequently asked questions