Product replacement checklist: what s947D requires when you recommend a switch
When advice recommends moving a client out of one financial product and into another, section 947D of the Corporations Act adds disclosures to the Statement of Advice. This page sets them out in plain English, with the best interests steps that sit behind a switch.
Checked against the sources listed on this page on 7 October 2026. General information, not legal advice: your licensee’s own requirements come first.
When does section 947D apply?
Section 947D applies when the advice is or includes a recommendation that the client dispose of, or reduce their interest in, all or part of a financial product and instead acquire, or increase their interest in, another one. It also applies when the client is advised to move out of a MySuper product and into another MySuper product or a choice product offered by the same fund.
The regulations can switch the section off for particular products or kinds of information (s947D(4)). Check whether one applies to the products you are comparing before relying on it.
What the Statement of Advice must disclose
- 1
Any charges the client will or may incur in getting out of, or reducing, the existing product.
Where this comes from: s947D(2)(a)(i), to the extent the information is known or could reasonably be found out.
- 2
Any charges the client will or may incur in getting into, or increasing, the recommended product.
Where this comes from: s947D(2)(a)(ii), to the same extent.
- 3
Any pecuniary or other benefits the client will or may lose, temporarily or otherwise, by taking the recommended action.
Where this comes from: s947D(2)(a)(iii), to the same extent.
- 4
Any other significant consequences for the client of taking the recommended action that you know, or ought reasonably to know, are likely.
Where this comes from: s947D(2)(b).
- 5
The amounts in items 1 to 3 stated in dollars.
Where this comes from: s947D(2)(d), as modified by reg 7.7.10A(5): dollars unless the regulations and an ASIC determination allow otherwise.
- 6
If you know there will or may be charges, lost benefits or other consequences but cannot reasonably find out what they are, a statement saying so.
Where this comes from: s947D(3).
These items are in addition to everything else a Statement of Advice must contain (s947B(5)(a) and s947C(5)(a)).
If the switch is given in a Record of Advice
A switch can be recommended as further advice or small investment advice, where the law allows a Record of Advice instead of a Statement of Advice. The switching information still has to be given. For further advice, the client must be given the s947D information at the same time as the advice or as soon as practicable after (s946B(3) as substituted by reg 7.7.10AE). The record itself must set out the s947D information and statement, or brief particulars of the information and an acknowledgement that the statement was given (reg 7.7.09(1)). A record of small investment advice must set out brief particulars of the s947D(2) information and the s947D(3) statement (reg 7.7.08C(2)).
The best interests steps behind a switch
Section 947D is about what the document says. Whether the switch should be recommended at all is the best interests duty. Section 961B(2)(e) requires a reasonable investigation into the products that might meet the client’s relevant objectives and needs, and an assessment of what it found. That investigation does not have to cover every product available, but if the client asks you to consider a specific product, it must include that product (s961D). All judgements must be based on the client’s relevant circumstances (s961B(2)(f)), the advice must be appropriate to the client (s961G), and where there is a conflict the client’s interests come first (s961J).
Questions advisers ask
What must an SoA disclose when it recommends switching products?
Under s947D(2): the charges for getting out of the existing product, the charges for getting into the new one, the benefits the client will or may lose, and any other significant consequences you know or ought reasonably to know are likely. The amounts must be in dollars. If you know there are such charges, losses or consequences but cannot find out what they are, s947D(3) requires a statement saying so.
Does s947D apply to a switch within the same super fund?
It applies to a recommendation to move out of a MySuper product and into another MySuper product or a choice product offered by the same fund (s947D(1)(b)). Other switches are covered by s947D(1)(a) when one product is disposed of or reduced and another acquired or increased.
Do the switching disclosures apply to a Record of Advice?
Yes, in shortened form. For further advice the client must be given the s947D information at the time of the advice or as soon as practicable after (s946B(3) as substituted by reg 7.7.10AE), and the record must contain it or brief particulars of it (reg 7.7.09(1)). A record of small investment advice must contain brief particulars of the information and the s947D(3) statement (reg 7.7.08C(2)).
Do I have to compare every product on the market?
No. Section 961D says a reasonable investigation does not require an investigation into every financial product available. If the client asks you to consider a specific product, the investigation must include it.