There is a power imbalance, but you have rights.

Enforcing your rights around financial advice should be simple. You are paying for a competitive service, which is regulated, from qualified people, who are ­licensed, to act in your best interest. The providers should be expert in their stated areas, open and transparent in their dealings and fee structures and, where necessary, answerable for any shortcomings to you and other authorities.

But there is a power imbalance. As consumers we are usually amateurs in the field of planning our financial futures – which is why we need professionals to help us make sense of our goals and help us to reach them. In such markets, especially those where our money, trust and time are at stake, we need rules that redress some of those imbalances. It also helps to be empowered by independent information and incentives to help make wiser choices. Financial planners do not, and shouldn’t, claim to have second sight when it comes to investments. They might recommend types of products to place your savings, but markets – as the GFC proved – move both up and down. It’s not their fault!

However, various scandals involving planners have led to long talks around how best to transform advice from an industry to a profession with the Future of Financial Advice (FoFA) laws. While there is still debate on certain aspects of these protections, it might not pay waiting for the legislation and disclosures to be perfect. Every year’s delay in taking the advice of an expert and trustworthy planner could impact on your financial goals.

The more you know about what your rights are should anything go wrong, as well as appreciating your responsibilities to make sure they go right, the less chance you’ll be stung by poor practices.


Amongst the most basic protections for consumers is the need for the authorisation under an Australian Financial Service Licence (AFSL) of anyone giving financial product advice. Planners must work under the oversight of a licensee, which may be a large firm in itself, to ensure compliance with the rules and sufficient training. It’s a safeguard to ensure there are adequate standards, but wasn’t sufficient to head off the conflicts of interests between the planner and consumers that have plagued the sector.

After high-profile collapses, such as Storm and Westpoint, ruined many older Australians’ retirement plans, the debate over FoFA began in earnest. The key issue was so-called conflicted advice. Some “planners” were more seduced by the size of their commissions for selling such investments, rather than warning their clients of the risks of catastrophic losses. There has been a total move away from commissions for superannuation and investments to provide transparency for the consumer of services for the planner.

FoFA has also spelled out a best interests duty for planners that removes some of the ambiguities around the clients’ wellbeing being paramount. There’s also greater disclosure rules on fees, which makes the cost of getting advice more transparent. In turn this allows better comparisons between different types of planners, hence unleashing more competition.


You need to be honest and thorough with the planner about your assets, income, potential income and your appetite for risk. The better picture they have, the better job they can do for you.
Try to be comfortable with some basic ideas around investments such as; the trade-off between risk and reward (the greater the return, the greater the risk of losses) and the wisdom of diversification (don’t put all your eggs in one basket).

Keep an eye on your investments and, given rare instances of fraud, don’t hand over total control of your money. The government’s MoneySmart website  says reputable planners should not ask to be granted your power of attorney.


Planners might not be responsible for market crashes, but they can be liable for misconduct and compliance breaches. If you are dissatisfied with the service, the first stop is to talk to the adviser.

If that doesn’t work there’s the internal dispute resolution system, details of which should be in the financial services guide provided by the planner. If there’s still no joy, you can escalate the matter to external dispute resolution schemes. Your planner must tell you to which one they belong. You can also complain to the adviser’s professional body, take the matter up with the Financial Ombudsman Service (FOS) or seek legal advice.

As ever, prevention is ­better than cure. If you don’t feel happy about your adviser and their service, ask questions. If still not satisfied, take it further. You have considerable rights in the area, but a little homework around what your options are can save much heartbreak.

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