Over the last decade, many Australians have sought financial advice. Over the same period, the financial advice industry has grown significantly. As at 1 April 2018, there were 25,386 financial advisers in Australia, an increase of around 41% compared with the number of financial advisers in August 2009.[1] The Productivity Commission has noted that in 2015/2016 the financial advice sector was estimated to be worth $4.6 billion in revenue.[2]
Three different issues have emerged in connection with the provision of financial advice. The first is ‘fees for no service’: ongoing advice fees charged when no advice was given to the client. The second is that clients have often been given poor advice that has left them worse off than they would have been if proper advice had been given. The third is the fragmented and ineffective disciplinary system for financial advisers.
[1] Background Paper No 6 (Part A), 7.
[2] Background Paper No 6 (Part A), 8.