You web browser may not be properly supported. To use this site and all its features we recommend using the latest versions of Chrome, Safari or Firefox

Slater and Gordon are continuing to service the community during the Coronavirus (COVID-19) pandemic. Click here for more info


You may be surprised to learn that thorough professional standards are not yet in place in the financial advice industry. So what level of care and expertise do you have a right to expect and will the Federal Government’s latest response bring positive change?

This week the Government released its response to the Financial System Inquiry Report – known as the Murray Report – which included recommendations to raise the competency of financial advice providers.

The Government has committed to develop legislation that will ‘raise the professional, ethical and educational standards of financial advisers’. The proposal is that legislation will be passed to ensure that advisers:

  • hold a degree;
  • pass an exam;
  • undertake continuous professional development;
  • subscribe to a code of ethics; and
  • undertake a professional year.

The Government has also proposed that ASIC’s register of financial advisors be amended to identify whether advisers have met the proposed new standards. This should make it easier for consumers to identify whether a financial adviser is the subject of any bans, disqualifications or code breaches. The Government also proposes to restrict use of the term ‘financial adviser’ and ‘financial planner’ to those listed on the register.

These are all positive steps. However, it will be necessary for the Government to make sure that the proposals are fully implemented in order to provide the maximum benefit to consumers.

Some people may be shocked that these professional standards are not yet in place given other professional advisers in the legal and accountancy professions are subject to strict educational and professional development controls. People who seek advice from a financial planner should have the right to expect that they will receive a certain level of care and expertise. Their affairs should be properly managed. However, while the overwhelming majority of planners provide professional and well considered advice to their clients, we do see clients that fall through the cracks.

The results of poor financial advice can be devastating, especially for people who have sought advice as they are approaching retirement.

While bad advice can obviously lead to significant financial losses; a more insidious result can be that the lifestyle that people envisaged for their retirement can be lost.

The recent impact of poor financial advice and the failure of poorly structured financial products is a well-known issue. There are numerous examples in recent history of planners failing to provide adequate advice to their clients. These problems have affected a broad spectrum of the industry. Slater and Gordon have acted for and assisted a large number of consumers who have been faced with difficulties as a result of the advice they have received.

If the recommendations in the Murray Report are fully implemented, some of the harm that can be caused by poor financial advice may be reduced in the future. This can only be a positive step, which is likely to benefit both the industry and consumers in the long run.

The contents of this blog post are considered accurate as at the date of publication. However the applicable laws may be subject to change, thereby affecting the accuracy of the article. The information contained in this blog post is of a general nature only and is not specific to anyone’s personal circumstances. Please seek legal advice before acting on any of the information contained in this post.

Thank you for your feedback.

Related blog posts

Consumer and the Law
Banking Royal Commission legislation introduced

On 28 November 2019, the Government introduced legislation in line with the recommendations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry. The legislation is designed to provide further protections for consumers and small businesses and is set to be passed in early 2020. Below is an overview of the proposed legislation. Click here for a recap of the Banking Royal Commission from our Head of Class Actions, Ben Hardwick. Under the proposed legislation, mortgage brokers will be required to act in the best interests of consumers when providing credit assistance. That means where there is a conflict of interest between the consumer’s...

Gavel and weights two people talking resized
Financial Negligence
The Australian Financial Complaints Authority’s powers are being expanded for 12 months: Do you …

The Australian Financial Complaints Authority (AFCA) is responsible for providing consumers and small businesses with free and independent dispute resolution for financial complaints. AFCA considers complaints in relation to: These complaints were previously handled by the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal. The usual time limit for making a complaint to AFCA is 6 years from the date you became aware of the financial loss.[1] However, when a complaint has already been through the financial firm’s internal dispute resolution process, the time limit is reduced to 2 years from the date you receive response from the...

Finance Planning People Documents Resized
Financial Negligence
Online scams and the Financial Ombudsmen service

As our population ages, our vulnerable elderly people are increasingly falling victim to elder abuse perpetrated by adult children, family members, friends and carers. But older Australians are also increasingly preyed upon by fraudsters. The Financial Ombudsman Service (FOS) has recently published two determinations which consider whether the older person’s bank is liable for “allowing” them to transfer funds. In the first case (Case number 431342, 2 December 2016), the Applicant transferred $123,019 from his bank account to a fraudster who kept the funds. The Applicant claimed the bank should compensate him for his loss. FOS found, however, that the bank did not cause or contribute...

We're here to help

Start your online claim check now. Or, if you have a question, get in touch with our team.