How to Choose a Financial Planner in Australia

Financial advice in Australia is tightly regulated by the Australian Securities and Investments Commission (ASIC) under the Corporations Act 2001. Understanding the licensing structure protects you from unlicensed operators and helps you verify credentials before handing over your finances.

• Australian Financial Services Licence (AFSL): Every financial adviser must operate under an AFSL - either as the licensee themselves, or as an authorised representative of a licensee. ASIC maintains the Financial Advisers Register (FAR) at moneysmart.gov.au/financial-advice/financial-advisers-register - search any adviser's name to verify their authorisation, qualifications, and any disciplinary history.
• FASEA education standard (now ASIC RG 263): From 1 January 2026, all financial advisers providing personal advice to retail clients must hold a relevant degree (or approved equivalent), pass the FASEA financial adviser exam, and complete a professional year. Advisers who passed the exam before this deadline and meet the experience requirements are grandfathered. Check your adviser's qualifications on the FAR.
• Personal advice vs general advice: Personal advice takes your specific circumstances into account and triggers the best interests duty. General advice does not - it carries a disclaimer that it has not considered your situation. Many product salespeople (insurance, mortgage brokers, bank staff) provide general advice only. Ensure your adviser is providing personal advice and is obligated by the best interests duty.
• Financial Services Guide (FSG): Every adviser must provide an FSG before giving advice. It discloses who they are, how they are paid, what services they offer, and how to complain. Read it - especially the remuneration section. If you don't receive an FSG, walk away.
• Statement of Advice (SOA): When personal advice is given, the adviser must provide a written SOA detailing the advice, the basis for it, any conflicts of interest, and the fees charged. For scaled advice (e.g. a specific topic like insurance review), a Record of Advice (ROA) may be used instead. Never act on verbal advice alone.

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Australian financial advice fees vary enormously - from $2,500 for a one-off plan to $15,000+ per year for ongoing comprehensive advice. Understanding how your adviser is paid is as important as understanding what they charge.

• Fee-for-service (fee-only): The adviser charges a flat fee, hourly rate, or percentage of assets managed - and receives no commissions. This is the most transparent structure and eliminates the conflict of interest that arises when an adviser profits from product recommendations. Look for advisers who are members of the Profession of Independent Financial Advisers (PIFA) or who explicitly disclose zero product commissions.
• Insurance commissions (still permitted): Life insurance commissions were not fully banned under the FoFA reforms. As at 2025, advisers can receive upfront commissions of up to 66% of the first-year premium and ongoing (trail) commissions of up to 22% of the annual premium on life, TPD, trauma and income protection policies. This creates a structural incentive to recommend higher premiums. Ask your adviser explicitly what commission they will receive on any insurance recommendation.
• Percentage-of-assets (AUM) fee: Common among investment advisers - typically 0.5–1.1% of the portfolio value per year. On a $500,000 portfolio this is $2,500–$5,500/year. Understand exactly what services are included: investment management only, or full financial planning? As the portfolio grows, question whether the service level justifies the increasing fee.
• Ongoing advice fee (OAF) and Fee Disclosure Statement (FDS): If you pay an ongoing fee, your adviser must provide an annual FDS showing all fees charged and services provided in the past 12 months. You must also provide annual consent (opt-in) to continue the arrangement. If you are not receiving meaningful ongoing service, cancel the arrangement.
• Total advice cost benchmark: According to Adviser Ratings, the average annual cost of comprehensive financial advice in Australia in 2024 was approximately $4,500–$6,000 per year for an established client. Initial advice (plan preparation, modelling, meetings) typically costs $3,000–$8,000 as a one-off engagement.

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Referrals from trusted friends or colleagues are the most reliable starting point, but always conduct your own due diligence regardless of the source.

• Step 1 - Search the Financial Advisers Register: Visit moneysmart.gov.au and search the adviser's name. Verify: current authorisation, qualifications (degree and FASEA exam pass), years of experience, and any bans or restrictions. A current registration is the minimum bar - not a quality guarantee.
• Step 2 - Check professional association membership: FPA (Financial Planning Association) CFP designation requires degree, exam, experience and CPD. AFA (Association of Financial Advisers) and SMSF Association have their own standards. While membership is not mandatory for practice, it signals commitment to professional development and ethical standards.
• Step 3 - Request an FSG before the first meeting: Review how the adviser is paid, what products and providers they can recommend (restricted to a panel, or open market?), and their complaints process. A restricted adviser can only recommend products from their licensee's approved product list - which may exclude superior options.
• Step 4 - Ask the right questions at the initial meeting: (a) How are you paid? (b) What commissions, if any, will you receive? (c) What is your specialisation? (d) What professional year and qualifications do you hold? (e) How often will we review my plan? (f) Who will I deal with - you, or a paraplanner? (g) What happens to my plan if you leave this firm?
• Step 5 - Get the SOA in writing and review it independently: Before signing any authority to proceed or investment authority, review the SOA carefully. Consider having a trusted friend, accountant, or a second adviser review it. Ensure the recommended strategy matches your goals and risk tolerance, not just the adviser's preferred products.

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Most Australian financial advisers are ethical professionals. But the industry has a documented history of misconduct - the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (2019) exposed widespread fee-for-no-service, inappropriate advice and conflicts of interest. These red flags protect you.

• Pressure to act quickly: Legitimate financial advice rarely requires an immediate decision. An adviser who pressures you to sign before you have read the SOA, or who creates artificial urgency around a product offer, is a warning sign.
• Products presented without explaining alternatives: A quality adviser explains why the recommended product is better than alternatives for your circumstances. If you only ever hear about products from one provider, ask why.
• Guaranteed returns: No legitimate investment adviser guarantees returns. The ASIC MoneySmart website lists 'guaranteed returns' as a key investment scam indicator. If it sounds too good, it is.
• No FSG provided: Legally required. Failure to provide one means the adviser is either unlicensed or non-compliant - both disqualifying.
• Not on the Financial Advisers Register: Operating without AFSL authorisation is a criminal offence. Always verify before proceeding.
• AFCA membership: Your adviser's licensee must be a member of the Australian Financial Complaints Authority (AFCA). AFCA can award compensation up to $1,000,000 for investment advice disputes and $250,000 for other disputes - free to consumers. Verify AFCA membership at afca.org.au.

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