Document ID: chunk:federal_register_of_legislation:F2024C01249:reg:4:p50
Version: federal_register_of_legislation:F2024C01249
Segment Type: reg
Provision Reference: reg 4 (pt 50/60)
Character Range: 949042–951746

Note: The total value of all financial investments in relation to which small investment advice is provided is calculated in accordance with subsection 946AA(2) of the Act.
 (5) Subregulations (6) and (7) apply to each of the following financial products:
 (a) superannuation;
 (b) managed investment schemes;
 (c) non‑derivative instalment warrants.
 (6) For small investment advice to a client that is related to the acquisition of one or more of the financial products listed in paragraphs (5)(a) to (c), the threshold amount in subregulation (1) must be calculated to include:
 (a) both:
 (i) the cost to the client of the initial investment; and
 (ii) other amounts that would be committed to by the client if the advice is taken; and
 (b) if the investment is not finite—the value of the investment is calculated for the 12‑month period beginning from the date that the record of advice is required by subregulation (10), (11) or (12) to be given to the client.
Examples:
1 Advice given in relation to switching superannuation funds
 A person earning $50 000 per annum is given advice to switch an existing superannuation fund balance of $12 000 to another superannuation fund and direct all future superannuation guarantee contributions to that same fund. In this event the total of the superannuation guarantee contributions in the first 12‑month period (ie $50 000 × 0.09 = $4 500) when added to the initial $12 000 transfer, would exceed the $15 000 threshold. In this example the exemption, in section 946AA of the Act, from the requirement to provide a Statement of Advice would not apply.
2 Advice given to acquire non‑derivative instalment warrants
 The terms of the non‑derivative instalment warrants are that $10 000 must be paid initially, a second payment of $12 000 in 18 months time and a third and final payment of $12 000 in 3 years time. The investment advice, assuming the client has committed to implementing the advice, concerns a $34 000 investment and therefore the exemption, in section 946AA of the Act, from the requirement to provide a Statement of Advice would not apply.
Note: The total value of all financial investments in relation to which small investment advice is provided is calculated in accordance with subsection 946AA(2) of the Act.
 (7) For small investment advice to a client that is related to the disposal of one or more of the financial products listed in paragraphs (5)(a) to (c), the threshold amount in subregulation (1) must be calculated to include:
 (a) the value to the client of the total divestment; and
 (b) other amounts reasonably related to the divestment that would be expended if the advice is taken.
Note: The total value of all financial