Last updated: 22 July 2026
Someone can call themselves a financial consultant and still offer little more than a sales conversation.
The title alone tells you very little.
What matters is the service they provide, the products they discuss, the licence covering their work and whether the advice is general or based on your personal circumstances.
A licensed financial adviser giving personal advice cannot simply recommend a super fund, insurance policy or investment because it pays well, belongs to an approved product list or makes the paperwork easier. Australian law places duties on the adviser, the business authorising them and, in some cases, the product provider taking money from your account.
According to my research into the current Australian financial-advice rules, your first question should not be, “Does this consultant sound convincing?” It should be, “What are they legally authorised to advise me about?”
That one question can expose a surprising amount.
General information only: The legal duties applying to a financial professional depend on the service, licence, client type and financial product involved. Financial advice, credit assistance, accounting, legal work and financial counselling follow different rules. Obtain personal legal advice if you believe misconduct has caused a financial loss.
“Financial consultant” is a broad label
The phrase “financial consultant” can describe several very different jobs.
The person may be:
- A licensed financial adviser.
- An authorised representative of a financial-services licensee.
- A mortgage or credit adviser.
- An accountant discussing tax or business records.
- A financial counsellor helping someone experiencing hardship.
- An investment salesperson.
- A super fund employee giving limited information or advice.
- A person selling education, coaching or trading courses.
Those roles do not carry identical obligations.
A financial adviser giving personal advice about superannuation, investments or retirement products is regulated differently from a person explaining general budgeting ideas.
Someone discussing home loans may need credit authorisation rather than financial-advice authorisation. An accountant can explain tax figures but may need separate authority before recommending a particular financial product.
Do not rely on the wording printed beneath the person’s name. Ask what licence or authorisation covers the service you are buying.
Our guide to financial consultant vs financial adviser explains why those job titles should not be treated as interchangeable.
Financial adviser and financial planner are restricted titles
Australian law restricts who can use titles including “financial adviser” and “financial planner” in many advice situations.
A person giving personal advice to retail clients about relevant financial products will ordinarily need to be properly authorised and, where required, registered as a relevant provider.
A supervised provisional adviser completing a professional year follows separate rules. They should not present themselves as if they have the same unrestricted status as an experienced registered adviser.
Before sharing account statements or paying an advice fee, check:
- The adviser’s full legal name.
- The business name.
- The Australian financial services licence covering the advice.
- Whether the person is an employee, authorised representative or licensee.
- The financial products they are authorised to discuss.
- Whether their registration is current.
- Whether any restrictions, disciplinary history or qualifications are recorded.
A polished website does not replace those checks.
Personal advice and general advice are not the same
This distinction controls many of the duties owed to you.
General advice
General advice does not take your objectives, financial position or personal needs into account.
Examples might include:
- A presentation explaining how super investment options work.
- A call-centre employee describing a fund’s available products.
- A newsletter discussing salary sacrifice in broad terms.
- A seminar comparing growth and conservative investments for a general audience.
The provider should warn you that the advice has not considered your personal circumstances.
General advice can still influence a major decision. The warning does not mean the information is worthless. It means you should not mistake it for a recommendation prepared specifically for you.
Personal advice
Advice becomes personal when the adviser considers one or more of your objectives, financial situation or needs, or when a reasonable person would expect those matters to have been considered.
Personal advice might involve recommending that you:
- Change super funds.
- Move into a different investment option.
- Start an account-based pension.
- Buy or cancel insurance.
- Make concessional contributions.
- Establish a self-managed super fund.
- Invest through a platform or managed fund.
The adviser cannot avoid personal-advice duties by placing the word “general” at the bottom of an email when the recommendation plainly responds to your circumstances.
They must act in your best interests when giving personal advice
A financial adviser providing personal advice to a retail client must act in the client’s best interests.
That does not mean the adviser must predict the winning investment. No adviser can guarantee what markets will do.
It means the advice process must properly address your situation.
The adviser should make reasonable enquiries about matters including:
- Your goals.
- Income and expenses.
- Assets and debts.
- Existing super accounts.
- Tax position.
- Dependants.
- Insurance needs.
- Time frame.
- Attitude towards investment risk.
- Need for access to cash.
- Expected retirement date.
A recommendation made after a five-minute conversation may be difficult to defend when the decision affects decades of savings.
The advice must be appropriate
Acting in your best interests is connected with another duty: the advice must be appropriate for you.
An adviser could recommend a well-run super fund and still give inappropriate advice if the move does not suit your circumstances.
For example, changing funds may:
- Cancel existing life or disability insurance.
- Trigger new medical underwriting.
- Increase administration or investment costs.
- Move you into a riskier investment.
- Remove an employer benefit.
- Give up rights under a defined benefit scheme.
- Create tax or transaction costs.
From my experience reviewing super recommendations, the weak point is often not the fund being recommended. It is the failure to explain what the client loses by leaving the old one.
Before accepting a recommendation, read our guide to questions to ask a financial consultant before hiring.
Your interests must come before the adviser’s interests
A financial adviser may face a conflict when one recommendation produces more income for them or their business.
The law does not assume every conflict can be solved by adding one sentence to a disclosure document.
When the adviser’s interests conflict with yours, your interests must receive priority.
Possible conflicts include:
- Receiving a benefit connected with a product recommendation.
- Working for a business that owns the investment platform.
- Recommending an in-house fund or managed account.
- Charging more when a larger amount is invested.
- Receiving referral payments.
- Being rewarded for sales or asset growth.
- Recommending services supplied by a related business.
Not every payment is prohibited. Some commissions and benefits are banned, while exemptions may apply to others.
Your right is to receive clear information about remuneration and relationships that could influence the recommendation.
Ask the adviser:
Do you, your licensee or any related business receive more money if I accept this recommendation?
The answer should be direct.
They must warn you when your information is incomplete
An adviser cannot produce reliable personal advice from missing or inaccurate information.
If you refuse to provide details or the adviser cannot obtain something needed for the recommendation, they may need to warn you that the advice is based on incomplete or incorrect information.
This can happen when:
- You cannot locate an old super statement.
- The adviser has not reviewed an insurance policy.
- Your household expenses are estimated.
- Your tax position is uncertain.
- A defined benefit amount has not been confirmed.
- Your partner’s finances affect the strategy but were excluded.
A warning does not automatically repair a poor advice process. If the missing information makes the recommendation unsafe, the adviser may need to delay the advice or limit its scope.
Limited advice still carries legal duties
You might ask for advice about one narrow question, perhaps whether to salary sacrifice an extra $100 a fortnight.
The adviser does not always need to prepare a complete life plan covering every bank account, insurance policy and future goal.
They can limit the scope.
The scope must still make sense. The adviser cannot ignore an obvious issue that would make the recommendation inappropriate.
For example, advice about making extra super contributions may need to consider:
- Your available contribution cap.
- Employer contributions already received.
- Carry-forward amounts.
- High-interest debt.
- Emergency savings.
- How long the money will remain inaccessible.
A narrowly worded engagement letter should not be used to avoid examining facts that directly affect the answer.
You should receive service and licence information
Before providing many financial services to a retail client, the advice business generally needs to provide a Financial Services Guide or make equivalent disclosure information available on its website.
This information should help you understand:
- Who is providing the service.
- Which licensee is responsible.
- What financial services are offered.
- How the adviser and business are paid.
- Relevant associations and relationships.
- How to make a complaint.
- Which dispute-resolution arrangements apply.
Website disclosure information should be accessible. You should not need to pay, create a member account or hand over personal records merely to find out who licenses the business.
Save a copy before accepting advice. Online wording can change later.
Personal advice should be documented
Personal advice to a retail client is generally set out in a Statement of Advice.
A shorter Record of Advice may be used in certain circumstances, including some later advice connected with an earlier strategy.
The document should explain:
- The advice provided.
- The information on which it relies.
- Your goals and circumstances.
- The recommendations.
- Why the recommendations suit you.
- Risks and disadvantages.
- Fees, commissions and other benefits.
- Conflicts or related-party arrangements.
- What the advice covers.
- What it leaves out.
Do not accept a thick document as proof that the advice is good.
Read the parts that explain why the recommendation is better for you. A hundred pages of standard product wording cannot replace a clear personal explanation.
The financial details in the advice should be accurate
Check the Statement of Advice before signing anything.
Confirm:
- Your age and relationship status.
- Income.
- Living expenses.
- Assets.
- Debts.
- Super balances.
- Insurance cover.
- Contribution history.
- Investment time frame.
- Risk profile.
An adviser may have based the strategy on a data-entry error.
A $30,000 mortgage entered as $300,000 can change the whole plan. So can an incorrect retirement age or missing insurance policy.
Ask for errors to be corrected before accepting the advice.
They must explain the risks, not hide them in fine print
Every investment recommendation carries some form of risk.
The adviser should explain risks connected with the actual strategy, not merely provide generic warnings that markets can rise and fall.
Depending on the recommendation, you may need to understand:
- Market losses.
- Inflation.
- Interest-rate movements.
- Currency exposure.
- Investment concentration.
- Liquidity restrictions.
- Borrowing risk.
- Tax consequences.
- Insurance cancellation.
- Platform failure or administration problems.
- The chance that retirement savings run out.
Ask what could go wrong during the first year and what could go wrong after ten years.
A consultant who discusses returns enthusiastically but becomes vague when asked about losses is not giving you the full picture.
They should explain what a recommendation will cost
Financial advice can involve several layers of cost.
You may pay:
- An initial advice fee.
- An implementation fee.
- An ongoing advice fee.
- A percentage of assets under advice.
- Investment platform fees.
- Fund administration fees.
- Investment management fees.
- Insurance premiums.
- Transaction costs.
Ask for the dollar cost, not only the percentage.
Our data shows how an asset-based fee changes with the amount invested:
| Account balance | Annual fee at 0.50% | Annual fee at 1.00% |
|---|---|---|
| $100,000 | $500 | $1,000 |
| $300,000 | $1,500 | $3,000 |
| $500,000 | $2,500 | $5,000 |
| $750,000 | $3,750 | $7,500 |
The adviser should explain what you receive for that money.
For a clearer breakdown, read what a financial consultant costs and what you should receive.
Ongoing advice fees require consent
An ongoing advice arrangement cannot continue forever because you signed one form years ago.
The adviser or fee recipient must obtain the required written consent to enter or renew the arrangement. The written information should tell you what services are expected and what fees will be charged during the relevant period.
You should be able to see:
- The fee amount or a reasonable estimate.
- How the fee is calculated.
- The period covered.
- The services promised.
- Which account will be charged.
- How to end the arrangement.
You can withdraw consent and end an ongoing arrangement, subject to the contract terms and any lawful notice process.
Do not sign a renewal merely because it arrives through an automated email. Check whether you received the services you paid for during the previous period.
Fees taken from super need proper authority
An advice business cannot treat your super account as an open payment facility.
Written consent or a written request may be required before ongoing or non-ongoing advice fees are deducted from super.
The super trustee also has duties when processing those deductions.
Check your transaction history for:
- Advice fees.
- Adviser service fees.
- Ongoing service charges.
- Implementation fees.
- Amounts described under unfamiliar labels.
If a fee appears that you did not approve, ask both the adviser and super fund for the authority used to deduct it.
They cannot charge for work they did not provide
An ongoing arrangement normally promises particular services.
Those services might include:
- An annual review.
- Portfolio monitoring.
- Contribution advice.
- Retirement planning updates.
- Insurance reviews.
- Access to the adviser for agreed questions.
The adviser must provide the services for which you are charged.
If you paid for a review that never occurred, ask for:
- The date the service was provided.
- The work completed.
- Copies of advice records.
- Any meeting notes.
- A refund calculation where the service was missed.
A monthly deduction does not prove that monthly work occurred.
An adviser is not required to recommend the cheapest product
Low cost matters, but price is not the only part of an appropriate recommendation.
A more expensive product may offer insurance, investment access or administration services that suit a particular client.
The adviser should explain why the added cost is justified.
The same applies in reverse. A familiar brand, premium platform or complicated investment structure should not be recommended merely because it looks sophisticated.
Ask:
What lower-cost alternatives did you consider, and why were they rejected?
A proper answer should connect the decision to your needs.
Switching advice requires a genuine comparison
Recommendations to replace one product with another need careful treatment.
The adviser should compare the existing arrangement with the proposed replacement.
For a super rollover, that can include:
- Current and proposed fees.
- Investment options.
- Insurance benefits.
- Exit or transaction costs.
- Employer contributions.
- Tax consequences.
- Service features.
- Any lost guarantees or defined benefits.
“The new fund is better” is not an adequate comparison.
Neither is a performance chart covering one unusually strong year.
They cannot promise investment returns
Financial consultants should not describe uncertain outcomes as guarantees.
Be cautious when someone promises:
- A fixed high return with little or no risk.
- Market-beating performance every year.
- A retirement balance that cannot fall.
- Tax savings without conditions.
- Access to super that ordinary rules prohibit.
Forecasts must rely on assumptions. Those assumptions should be disclosed.
A projection may use an expected investment return, inflation rate, fee estimate and contribution pattern. Change any of those numbers and the result changes.
The adviser should not present a modelled outcome as money already earned.
Tax advice has boundaries
Superannuation recommendations often involve tax.
An adviser may discuss tax consequences connected with financial advice when properly authorised and qualified. That does not automatically mean they can prepare your tax return, give every form of tax advice or replace a registered tax agent.
Ask which tax services are covered.
Check whether the recommendation depends on:
- A tax deduction.
- A contribution cap.
- Carry-forward amounts.
- Capital gains.
- Division 293 tax.
- Pension tax treatment.
- A spouse contribution offset.
Your personal information must be protected
Financial advisers often receive enough information to build a detailed picture of your life.
Their files may contain:
- Bank statements.
- Tax returns.
- Super balances.
- Medical information.
- Insurance records.
- Identification documents.
- Family information.
- Details about debts and property.
The business must handle personal information under applicable privacy and security rules.
Ask how documents are stored, who can access them and how they are sent.
A request to email an unencrypted passport copy to an unfamiliar address deserves caution.
They must keep advice records
Personal advice records generally need to be retained for at least seven years.
Records may include:
- Statements of Advice.
- Records of Advice.
- Fact-finding documents.
- Risk questionnaires.
- File notes.
- Emails and correspondence.
- Fee consents.
- Implementation instructions.
Ask for copies of your documents before ending the relationship.
Good records matter when an adviser leaves the business, a recommendation causes a later problem or you need to prove what was agreed.
They cannot move money without authority
An adviser may help implement recommendations after you accept them.
They still need appropriate authority.
Read each form before signing it. Check:
- Which account is being opened or closed.
- The amount being transferred.
- The investment option selected.
- Insurance being added or cancelled.
- Fees being authorised.
- Who can give future instructions.
Do not sign blank forms.
Do not give an adviser your myGov password or internet-banking login.
A legitimate advice process does not require surrendering personal account security.
You have the right to ask questions
A consultant may know more about financial products than you do. That does not give them the right to rush the decision.
Ask:
- What are you authorised to advise me about?
- Who holds the licence?
- Is this general or personal advice?
- What information did you use?
- What did you leave outside the advice?
- What alternatives did you consider?
- How are you paid?
- Does anyone earn more if I accept?
- What will this cost in dollars?
- What do I lose by following the recommendation?
- What could cause the strategy to fail?
- Can I take the documents away before deciding?
A reasonable adviser should expect those questions.
Red flags before you sign
Step back when a financial consultant:
- Refuses to identify their licensee.
- Cannot be found under the expected adviser details.
- Promises unusually high returns without meaningful risk.
- Pushes one product before learning about you.
- Calls personal advice “general” to avoid paperwork.
- Will not explain fees in dollars.
- Uses urgency to stop you seeking another opinion.
- Asks you to sign incomplete forms.
- Dismisses insurance being lost during a rollover.
- Suggests secret access to preserved super.
- Will not provide the advice in writing.
- Asks for your myGov or banking password.
A second opinion may cost less than correcting a bad financial decision.
What to do when the advice looks wrong
Act quickly, but keep the communication factual.
Start by gathering:
- The Statement or Record of Advice.
- The Financial Services Guide or website disclosure information.
- Fee agreements and consents.
- Emails.
- Application forms.
- Account statements.
- Meeting notes.
- Advertisements or promises that influenced you.
Write to the advice business and explain:
- What happened.
- Why you believe it was wrong.
- The financial loss or fee involved.
- What outcome you are requesting.
Ask for the complaint to be handled through the business’s internal dispute-resolution process.
If the firm does not resolve the matter, eligible complaints can generally be taken to the Australian Financial Complaints Authority. The service is free for consumers.
ASIC receives reports about misconduct and regulatory breaches, although it does not act as the personal compensation service for every individual dispute.
Time limits can apply. Do not leave a complaint sitting in a drawer for years.
Ethical behaviour and legal duty are not identical
The original draft focused heavily on ethics. Ethics matter, but they should not be confused with enforceable legal obligations.
An adviser might behave rudely without breaking financial-services law. Another may sound kind and attentive while giving conflicted or poorly researched advice.
Your rights do not depend on whether the consultant appears friendly.
Look for the evidence:
- Correct authorisation.
- A proper advice process.
- Accurate personal information.
- Written reasons.
- Clear fees.
- Conflicts disclosed and managed.
- Agreed services provided.
- Records retained.
- A working complaints process.
Know what you are buying before you buy it
Financial advice can be worth paying for. A sound recommendation may help organise scattered accounts, control tax, protect a family or turn retirement savings into usable income.
That value does not come from the job title.
It comes from work that is authorised, properly researched, suitable for your circumstances and explained well enough for you to make your own decision.
Check the adviser. Read the scope. Question the fees. Ask what you lose as well as what you might gain.
You do not need to understand every section of financial-services law before meeting a consultant.
You do need to know that the consultant has legal duties, and that asking them to prove how they met those duties is entirely reasonable.