ASIC financial adviser exam, Advice, retail clients and disclosure (FSG, SOA, ROA, PDS) question: keep Paolo's disclosure up to date

ASIC examAdvice, retail clients and disclosure (FSG, SOA, ROA, PDS)

Cedar Advice, an AFS licensee that does not use website disclosure information, gave Paolo its FSG on 2 May when he booked an appointment. On 20 May, before his first advice meeting on 1 June, Cedar raises its initial advice fee from A$3,300 to A$4,400. To keep Paolo's disclosure up to date, Cedar should…

A do nothing: the FSG had to be correct only on the date Paolo received it
B tell Paolo about the new fee orally after the advice has been given
C give Paolo a Supplementary FSG with the new fee before the advice
D give him an updated FSG with the SOA, once the advice is complete

Show the answer and explanation

Answer: C. give Paolo a Supplementary FSG with the new fee before the advice

Section 941F of the Corporations Act 2001 (compilation 19 Sep 2026) requires updated disclosure before the service where circumstances change after the FSG is given and the out-of-date information is materially adverse to a reasonable retail client; a fee rise from A$3,300 to A$4,400 is. Cedar may give a new FSG or a Supplementary FSG containing the updated information (ss943A-943D; s943D treats it as part of the FSG). The FSG must be up to date when given (s941E), and s941F then tests it again before the service, so correctness on 2 May is not enough. Oral notice after the advice is too late, and an updated FSG given with the SOA arrives after the service it is meant to precede.

Common mistake

FSG accuracy matters at the time of the service, not just when it was handed over.

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