Who Can Legally Give Financial Advice in Australia
Australia has strict licensing requirements for financial advice following the Royal Commission into Banking, Superannuation and Financial Services (2019). Understanding who is and isn't qualified protects you from inappropriate advice.
- Licensed financial advisers: Must be registered on the ASIC Financial Advisers Register (search at moneysmart.gov.au/financial-advice/financial-advisers-register). Must hold an AFS licence or be an authorised representative of a licensee. Must have completed approved qualifications (bachelor degree level or equivalent from 2026).
- The FASEA/FAQS education standards: All financial advisers must have passed the Financial Adviser Exam (FAE) and hold an approved degree or equivalent. The industry has become significantly more professionalised since 2019 - there are fewer advisers but they are better qualified.
- CFP designation: Certified Financial Planner (CFP) is the industry's gold standard designation, requiring additional study and ethical requirements above the minimum. A CFP designation is a positive signal but not the only quality indicator.
- Accountants and tax agents: Can give tax advice but are NOT licensed to give financial product advice (super, insurance, investments) unless they also hold an AFSL or are an authorised representative. 'My accountant told me to put everything in super' is advice that requires a financial licence - verify your accountant's credentials for any investment/super recommendations.
- General advice vs personal advice: General advice is not tailored to your situation - it's legally required to carry a warning. Personal advice considers your circumstances and goals and triggers the full best interests duty. Always seek personal advice for significant decisions.
- Mortgage brokers: Licensed under the Credit Act, not the Corporations Act. Can advise on loans but not on investments, super, or insurance. Do not conflate mortgage advice with holistic financial planning.
The Financial Advice Process: What to Expect
A legitimate financial advice engagement follows a structured process with legally required documentation at each stage. Knowing what to expect helps you assess whether an adviser is doing their job properly.
- Financial Services Guide (FSG): Every adviser must give you an FSG before providing advice. It discloses who they are, who licenses them, what services they offer, and how they are paid. Read it carefully - conflict-of-interest disclosures are here.
- Fact-find: A detailed questionnaire covering your income, assets, liabilities, insurance, super, tax position, goals, and risk tolerance. This is the foundation of good advice - an adviser who skips this or treats it superficially is cutting corners.
- Statement of Advice (SOA): The formal written document containing personal recommendations, the basis for those recommendations, and disclosure of any conflicts of interest or fees. For straightforward matters, a Record of Advice (ROA) may replace the SOA for subsequent advice. The SOA can be long (50-100+ pages) - focus on the strategy sections and fee disclosures.
- Implementation: After you accept the SOA, the adviser (or their support team) implements the recommended strategies - completing super rollovers, establishing investment accounts, applying for insurance, lodging Centrelink forms.
- Ongoing review: A good ongoing advice relationship includes at least annual reviews - reassessing your situation, rebalancing portfolios, updating strategies as legislation changes. This is where ongoing fees are justified (or not).
- Best interests duty: Advisers are legally required to act in your best interest. This includes recommending the most appropriate product (not the one that pays them more), considering alternatives, and warning you of significant risks. Breach of best interests duty is the most common AFCA complaint category.
What Financial Advice Costs in Australia
Advice costs have risen significantly since the Royal Commission eliminated commissions on most products. Understanding the fee structures helps you evaluate whether the cost is justified for your situation.
- Initial advice (SOA) fee: Typically $3,000–$6,000 for a comprehensive plan covering investments, super, insurance, and tax strategies. Simple advice (e.g., super consolidation only) may be $1,500–$3,000. Complex situations (business owners, SMSFs, estate planning) can exceed $10,000.
- Ongoing advice fee: Typically $3,000–$6,000/year for an ongoing relationship. Some firms charge a percentage of funds under management (FUM) - commonly 0.5–1.0% p.a. On a $500k portfolio, 1% = $5,000/year. Fee-for-service (flat dollar) is generally more transparent and aligns incentives better than percentage-based.
- Implementation fees: Some advisers charge separately for implementing recommendations - particularly for insurance applications, SMSF establishment, or complex transactions. Ask upfront.
- Commissions (limited survival): The ban on trailing commissions on investment products is essentially complete. However, life insurance commissions survive under transitional arrangements - an upfront commission of up to 60% of first-year premium and 20% ongoing is still permissible for life insurance sold through advisers. This is a meaningful conflict to be aware of.
- Super fund intra-fund advice: Many super funds offer free or low-cost advice on fund-specific matters (investment options, insurance within the fund, contribution strategies) to members. This is limited in scope but genuinely useful and free - start here before engaging a paid adviser.
- Free resources: ASIC's MoneySmart website (moneysmart.gov.au) offers free guidance and calculators. National Debt Helpline (1800 007 007) provides free financial counselling. These are valuable first steps for those with straightforward situations or financial hardship.
How to Find and Evaluate a Good Adviser
Finding a quality financial adviser takes more than a Google search. These steps help you identify advisers with the right qualifications, the right fit, and no problematic conflicts.
- Check the ASIC register: Before any meeting, look up the adviser's name at moneysmart.gov.au/financial-advice/financial-advisers-register. Confirm they are currently registered, check their qualifications, and look for any banning orders or enforceable undertakings. This takes 2 minutes and is non-negotiable.
- FPA and FAAA directories: The Financial Planning Association (FPA) and Financial Advice Association of Australia (FAAA - formed from the merger of FPA and AFA in 2023) maintain directories of members who have agreed to professional standards above the minimum. These are useful starting points.
- Ask about their licensee: Who licenses the adviser? Smaller, independent AFSL holders typically have fewer product conflicts than advisers licensed through bank or insurer-owned dealer groups. This doesn't guarantee quality but reduces some structural conflicts.
- First meeting questions: How are you paid? Who licenses you? What is your area of specialisation? How many clients do you have? What would you tell me if you couldn't help me? A good adviser welcomes these questions - a defensive reaction is a red flag.
- Specialisation matters: A generalist adviser may not be the best choice for an SMSF, a deceased estate, a business owner exit, or a disability-specific situation. Look for advisers with relevant specialisations and credentials (SSA for super, ACFA for aged care, CFP for comprehensive planning).
- AFCA complaints history: The Australian Financial Complaints Authority (AFCA) is the external dispute resolution scheme for financial services. You can check if an adviser has had AFCA determinations against them - this information is public.
When to Seek Advice - and When to Start Yourself
Not every financial decision requires a paid adviser. For straightforward situations - consolidating super, starting an ETF portfolio, choosing a savings account - the free resources at MoneySmart, your super fund's intra-fund advice, and quality personal finance content can take you far. Engage a paid adviser when your situation involves complexity: business ownership, significant assets, insurance needs, approaching retirement, estate planning, or divorce. The cost of a $4,000 SOA is trivial compared to the value of getting a $1 million retirement portfolio right.
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