“Cookie-cutter” advice practices breach key obligations under the Corporations Act and the Code of Ethics, and are regularly penalised by ASIC, AFCA, and the FSCP.
Introduction
“Cookie-cutter” advice refers to generic, templated financial advice that is not tailored to an individual client’s circumstances. Because they are not personalised to a client’s ‘objectives, financial situation and needs’ (as required under S961B of the Corporations Act), such ‘one-size-fits-all’ recommendations often fail to meet the Best Interests Duty (BID) under law.
At a time when efficiency is an increasingly important focus for advisers, using templated processes and documents can be seen as a powerful enabler of time savings, and to the extent that such savings allow advisers to maintain downward pressure on their costs, advice clients can ultimately benefit from such a systemised approach. However, when streamlining and repetition comes at the expense truly tailored recommendations, the risk of inappropriate advice (which is non-compliant, contravenes Standard 5 of the Code of Ethics, and is potentially harmful) becomes real.
As recent enforcement actions by ASIC highlight, “cookie-cutter” advice remains an industry problem across various advice areas – from superannuation and investments to insurance – despite heightened regulatory scrutiny.
In this article, we will examine the nature of generic or “cookie cutter” advice, why it risks being non-compliant, and the consequences for advisers and clients. We will also provide actionable strategies to ensure advice is personalised, appropriate, and in the client’s best interests.
Cookie cutter advice in the news
Cookie cutter advice is not a new problem and has indeed been on the radar of regulators and AFCA for quite some time. As AFCA Lead Ombudsman Shail Singh told an audience in 2023:
“We’ve seen batches of disputes where you see the same SOA for every single client. It’s hard to understand how that advice is tailored to that particular person.”[1]
More recently, several high-profile generic advice cases have received widespread news coverage.
Generic advice case 1 – SMSF property ‘one-size-fits-all’ strategy
In April 2025, the Federal Court penalised an advice business $11 million after finding the firm’s advisers gave “cookie-cutter” advice to roll clients’ super into SMSFs and buy property through a related company[2]
The Court found advice given by the firm was virtually identical for many clients and failed to consider each client’s individual circumstances or objectives. Not only did this breach BID, but it was also found to have been motivated by conflicted remuneration, with the firm paying over $130,000 in bonuses to three advisers in relation to client property purchases[3].
The Court found the firm’s misconduct was deliberate and sustained over years – resulting in poor outcomes for consumers. Compounding the problem, the firm had earlier failed to comply with an AFCA compensation order – triggering the new Compensation Scheme of Last Resort (CSLR) to pay out claims and leading to ASIC automatically cancelling their license in late 2024.
The significant financial penalty handed to the firm in this case is a timely reminder of how seriously regulators view one size fits all advice. To the extent that the SMSF – property nexus has already been seen to be problematic in an advice context, this case likely played a part in ASIC’s decision to further intensify their scrutiny of the sector, with them naming inappropriate super rollovers into conflicted SMSF property models as an enforcement priority going forward[4].
Generic advice case 2 – Insurance advice lacking personalisation
Making the news in March 2025 was ASIC’s investigation – and subsequent banning – of a Queensland adviser.
ASIC’s review of his advice found he recommended life insurance cover that included mortgages his clients did not even have[5]. According to ASIC, the adviser in question was relying on a generic formula (e.g. “cover all clients for a mortgage”) without tailoring to actual client debt levels. ASIC found he (the adviser) consistently failed to act in clients’ best interests or provide appropriate advice. His tendency to have clients sign documents (like insurance applications and ongoing service agreements) before giving them the Statement of Advice was, according to ASIC, further evidence of a generic, ‘rubber-stamp process’. In 2025, ASIC banned him from the industry for five years.
In this case, using a standard insurance recommendation for all clients breached his BID obligations by providing advice that did not take into a client’s specific circumstances and needs, and was therefore not appropriate. Regulators considered this so serious that the adviser was deemed “not fit and proper” to advise.
Generic advice case 3 – Superannuation contribution errors
Generic advice in the superannuation sector was in the news again in 2025 when a series of Financial Services and Credit Panel (FSCP) actions from late 2024 were made public.
ASIC’s involvement in this case started with them identifying multiple instances – or a theme – from breach reports submitted by licensees in 2024. These reports, centering on poor advice in relation to superannuation contributions, highlighted a pattern of clients exceeding their superannuation contribution caps – or untaxed plan caps – resulting in them incurring additional tax[6].
Believing these breaches were potentially flagging a systemic problem where advisers were not doing the necessary personalised calculations – but instead using a generic ‘one-size-fits-all approach – ASIC convened several FSCP hearings in the second half of 2024. The FSCP found those advisers likely failed the Best Interest Duty and Code of Ethics by not being diligent about client specifics.
For example, in one determination the FSCP detailed that an adviser told a client to make a $110,000 non-concessional super contribution for 2021–22 and $301,000 for 2022–23 – ignoring that the client only had $124 of cap space left due to a prior bring-forward arrangement[7]. Following this generic advice, the client inadvertently exceeded her cap by over $109,000 and faced a 47% tax on the excess, plus had to withdraw over $312k from her super the next year.
As reported in 2025, the outcomes of those hearings so far include:
- two advisers receiving reprimands,
- one adviser being ordered to have an independent expert audit his next 10 advice files, and
- another being directed to undertake additional training.
These cases show that even without malicious intent, a ‘templated’ (cookie cutter) approach to technical areas like superannuation (e.g. assuming every client can contribute a set maximum amount) can badly backfire. Advisers must identify each client’s personal circumstances – like their remaining contribution caps – to ensure that strategy is genuinely and specifically in that client’s best interests.
Generic advice case 4: Unbalanced “one-size” portfolios and in-house products
A raft of AFCA complaints in recent years has highlighted situations where firms put clients into nearly identical portfolios or in-house products, disregarding their suitability.
Undoubtedly the most high-profile example of this in recent years is the actions of a now collapsed advisory firm. This case – so egregious in nature and enormous in scale – has had a direct financial impact on every individual financial adviser, requiring them to pay a much higher CSLR Levy, than would otherwise have been the case.
The firm was found to have advised many clients to heavily invest in its in-house US property fund, regardless of their individual risk profiles. In over 50 AFCA determinations on associated cases – the vast majority of which were resolved in the clients’ favour – the common themes identified were (1) that the advice failed to comply with the Best Interests Duty, (2) was inappropriate to the clients, and (3) did not prioritise the clients’ interests ahead of their own.
For example, as noted by the FAAA in their Senate Committee submission[8], the firm employed “an investment committee that made investment decisions on behalf of individual clients, effectively pushing clients to invest in in-house products, independent of their goals, objectives and personal circumstances.”
Many of those clients ended up over-concentrated in one illiquid asset (the US property fund) and suffered significant losses.
Recent modelling by the FAAA has estimated the future costs of compensation to over 800 affected clients could top $103 million, based on an average payout of $122,000 per client[9].
Regulatory responses: enforcement, discipline and complaints
ASIC has made clear that cookie-cutter advice, especially when combined with conflicts of interest or poor outcomes, will attract strong enforcement action. The first case detailed above resulted in one of the largest penalties against an advice firm to date – over $11 million for “inappropriate ‘cookie cutter’ advice” and conflicted bonus payments.
The FSCP is now tackling many of the cases of substandard advice brought to light through the new breach reporting regime. Sanctions the FSCP can utilise include formal reprimands, mandatory professional development, or requiring an audit of an adviser’s work. While an adverse FSCP outcome might seem lighter touch than a ban, it is still extremely serious, being essentially a public warning, putting advisers (and their licensees) on notice to lift their game or face harsher consequences.
From an AFCA perspective, their reports and determinations demonstrate that clients have been largely successful in claims where an adviser’s recommendation was found to have not been appropriately tailored. Breaches of the Best Interest Duty and “cookie-cutter” approaches often lead AFCA to find the advice was unsuitable, requiring the adviser or their firm to compensate the client. Advisers and licensees thus end up ultimately footing the bill for losses that cookie-cutter advice causes – whether those losses be poor investment performance, unwarranted fees, or tax penalties incurred by the client.
Additionally, if a firm fails to pay an amount AFCA has awarded to a client as a result of a determination in their favour, the CSLR will pay the client and the firm’s AFSL will be automatically cancelled (as happened in the Case Study 1).
In other words, advisers who deliver generic, non-compliant advice not only risk legal action – and reputational damage – they can also lose their ability to practice if their advice leads to unpaid client redress.
Practical tips to ensure personalised, compliant advice
Although generic advice can often be inadvertent, rather than malicious, the legal and reputational consequences can still be severe, making it crucial for advisers to protect themselves and better serve clients by implementing strong safeguards against crossing the line. Below are some practical steps and best practices that can help ensure advice is tailored, high-quality, and in line with regulatory expectations:
1. Know Your Client (KYC) and document that knowledge
Go beyond the basic fact-find. Make reasonable inquiries into each client’s complete personal circumstances (income, debts, goals, risk tolerance, family situation, etc.) and document these. A thorough understanding of the client is the foundation for tailored advice. ASIC explicitly reminds advisers that they must identify relevant personal circumstances – for example, a client’s superannuation contribution history and caps – before making recommendations, so that the advice is in the client’s best interest. Ensure your knowledge of the client is up to date – over the course of a year a client may change jobs, address, or relationship status, all of which can render previous advice inappropriate.
2. Your investment philosophy does not excuse a ‘one-size-fits-all’ strategy
Be wary of any pre-determined course of action that you find yourself recommending to everyone. Not every client should start an SMSF, not everyone should buy an investment property, and not everyone should have the exact same portfolio or insurance coverage. If your investment philosophy is 100% passive – grounded in your passionate beliefs about indexing – that doesn’t mean such an approach is suitable for all individuals (in which case it is better to not take a client on, rather than force them into your blanket approach). If you catch yourself giving the same advice to most clients, pause and ask yourself whether it’s because it truly fits each one individually, or is actually because of your own bias or convenience. Informed consent – in itself – will not protect against regulatory action if advice is found to be generic. A good habit is to explicitly write in the advice document: “Why this advice is suitable for [Client Name]” and answer that by referencing their personal goals and circumstances. This not only helps the client understand the advice, but it also forces you to confirm the advice makes sense for them specifically.
3. When using templates, customise and review
While using templated SOA sections or standardised modelling can improve efficiency, never rely on a template without heavy customisation. Every boilerplate statement in an SOA should be checked against the client’s details for relevance and accuracy. Remove or edit any generic text that isn’t applicable to the client at hand. It’s especially crucial to get basic client details right – something as simple as having the wrong name or wrong personal info in an SOA (don’t laugh – it happens) is a glaring sign of cookie-cutter advice and will undermine client trust immediately. Implement a peer review or compliance check for each advice document: another set of eyes (a colleague or supervisor) should look for any signs that the advice isn’t adequately personalised (e.g. goals section doesn’t reflect the client’s real goals, risk profile on file doesn’t match the recommended asset allocation, etc.). Some firms conduct pre-vet audits of a sample of advice files – a good practice to catch generic advice issues before they reach the client. In short, treat templates as a starting point, not a finished product, and painstakingly tailor the final output to the individual client.
4. Take risk profiling seriously and be aware of changing circumstances
It sounds so obvious as to be unnecessary, but advice being mismatched to individual clients is still a significant issue. For the majority of advisers who do the right thing, there is still a danger of mismatches occurring where there is a disconnect between what the client’s circumstances are understood to be, and what they actually are. Such discrepancies can occur where an adviser isn’t made aware by the client of major changes in their life. Another, potentially more serious, scenario is where a risk profiling process – or the way that process is applied by an individual adviser – is insufficiently robust, resulting in clients taking on inappropriate amounts of risk (whether that be too little or too much). Always ensure there is a clear and defensible match between a client’s profile and the recommendations made.
5. Stay up to date with rules, regulations, and product features
Some instances of generic advice failings come from advisers not staying fully up-to-date or diligent on technical matters – for example, superannuation contribution limits, Centrelink rules, or product terms. To give appropriate advice, advisers need current knowledge. Regularly refresh your training (CPD) on areas you advise in. Leverage your BDM relationships and the technical support and resources offered by many fund managers and insurers. If you’re unsure about something (e.g., how the three-year bring-forward cap works in a specific scenario), consult a specialist or do further research. If you are a self-licensed adviser, tap into your peer network or use an advice community to crowdsource an answer to your question.
6. Implement robust compliance and file-keeping systems
Smaller practitioners, in particular, should ensure they have compliance systems somewhat akin to larger licensees. This includes documenting the rationale for advice, keeping file notes of conversations (to capture personal nuances), and having a process to check the quality of advice documents. Consider using checklists that force you to address client-specific factors (e.g., “Have I considered the client’s existing insurances? their tax bracket? etc.”). If you use standardised text, maintain a version control or note when you last updated those sections for regulatory changes. Given that ASIC has introduced more intensive breach reporting obligations (licensees must report even minor advice compliance breaches now), having an internal compliance review can catch issues early and allow you to remediate them. Also, if a mistake is discovered, act quickly to remediate the client – this can mitigate regulatory penalties. A culture of compliance and continuous improvement in advice processes is the best antidote to unintentional cookie-cutter outcomes.
7. Focus on client understanding and deeper engagement
Personalised advice isn’t just about numbers and financial strategy – it’s also about ensuring the client genuinely understands and agrees that the plan suits them. Take the time to explain why the advice makes sense for them personally, invite questions, and gauge their comfort. Sometimes a client will only be forthcoming about their circumstances and plans for the future during a deeper conversation. By fostering open dialogue and taking the time to genuinely connect with a client – rather than treating them as a transaction – you will build trust and be more equipped to truly tailor your advice.
By implementing these safeguards, advisers can ensure they deliver high-quality, bespoke advice that stands up to regulatory scrutiny and fulfills the spirit of the Best Interest Duty. The extra effort to personalise each recommendation is ultimately an investment in the adviser’s own practice – it leads to better client outcomes, fewer compliance headaches, and a stronger reputation in the long run.
Conclusion
“Cookie cutter” or generic financial advice – intentional or otherwise – remains problematic, and recent action by regulators, courts, and AFCA has demonstrated their willingness to identify and punish advisers for advice that appears copied and pasted or in some way fails to account for a client’s individual situation. At a time when templated documents and processes are seen as a key enabler of practice efficiencies, advisers must remain vigilant.
The lessons from recent cases –including multi-million-dollar penalties, licence cancellations, and disciplinary orders – are clear warnings that every client must be treated as unique and placed at the centre of the advice process.
The cost of failing to do so is measured not just in fines or bans, but in real consumer harm – something that genuinely client-centric advisers seek to avoid at all costs. By recommitting to personalised, diligent advice and using robust compliance practices, advisers can both meet their legal obligations and deliver better outcomes for clients. In the end, tailoring advice is not just about avoiding penalties; it is the cornerstone of building trust, achieving client goals, and upholding the integrity of the financial advice profession.
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References:
[1] https://www.professionalplanner.com.au/2023/06/simpler-dealing-with-banks-than-smaller-licensees/#:~:text=in%20planning%20in%202008%2C%20I,%E2%80%9D
[2] https://www.ifa.com.au/news/35635-cookie-cutter-advice-lands-financial-firm-11m-penalty#:~:text=According%20to%20an%20ASIC%20statement%2C,entity%2C%20Equiti%20Property%20Pty%20Ltd
[3] https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2025-releases/25-063mr-financial-services-provider-penalised-11-million-over-cookie-cutter-advice-and-conflicted-bonus-payments/#:~:text=DOD%20Bookkeeping%20Pty%20Ltd%20,provided%20inappropriate%20%E2%80%9Ccookie%20cutter%E2%80%9D%20advice
[4] https://www.professionalplanner.com.au/2025/04/court-hands-down-11m-penalty-for-conflicted-smsf-property-advice/#:~:text=The%20ruling%20comes%20as%20ASIC,of%20the%20regulator%E2%80%99s%20enforcement%20priorities
[5] https://riskinfo.com.au/news/2025/03/28/adviser-banned-for-five-years-2/#:~:text=ASIC%20has%20banned%20financial%20adviser,clients%20had%20not%20yet%20obtained
[6] https://www.asic.gov.au/about-asic/news-centre/news-items/asic-targets-financial-advisers-providing-poor-superannuation-advice-through-the-financial-services-and-credit-panel/#:~:text=ASIC%20convened%20multiple%20sitting%20panels,in%20clients%20paying%20more%20tax
[7] https://www.ifa.com.au/news/35656-fscp-reprimands-another-adviser-over-super-contribution-errors#:~:text=In%20its%20determination%2C%20the%20panel,total%29%20for%20FY22%E2%80%9323
[8] https://faaa.au/wp-content/uploads/2024/12/12.FAAA_.pdf
[9] https://www.moneymanagement.com.au/news/financial-planning/faaa-expects-dixon-push-cslr-levy-past-100m-fy26-27#:~:text=The%20remainder%20they%20will%20be,which%20represents%20$12%2C500%20per%20adviser
CPD Quiz
The following CPD quiz is accredited by the FAAA at 0.5 hour.
Legislated CPD Area: Regulatory Compliance & Consumer Protection (0.5 hrs)
ASIC Knowledge Requirements: Regulatory Environment (0.5 hrs)
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