Paywall story, effects of financial advice recommendations from the Hayne royal commission into banking and finance.
“the median price of financial advice has climbed and thousands of financial planners have left the profession. That has left many Australians stranded without affordable guidance during a cost-of-living crisis, and with the impending retirement of millions of Baby Boomers.
In fact, more than 500,000 Australians have been ‘sacked’ by their financial advisers in recent years, says Angus Woods, the executive director of Advisor Ratings, a searchable database of registered financial planners.
“This issue stems more from industry challenges than ethical ones, largely due to stringent government legislation introduced after the [banking] royal commission,” he says.
“These regulations aimed to protect consumers from poor advice but have inadvertently led to nearly half of the advisers leaving the profession or focusing only on wealthy clients.”
The median financial advice fee last year was $3960, up 7 per cent on the year before, Adviser Ratings research shows. Over the past five years, fees have risen nearly 60 per cent. Separate analysis by Investment Trends finds the average fee for ongoing advice, which generally includes more detailed investment management and regular check-ups, increased 18 per cent in 2023 to $4700. Upfront fees – what you pay to sign up and get a statement of advice – rose 25 per cent to $4000.
Woods says some advisers have decided to let go of lower-fee clients to stay profitable. Others are focused on investors classified as ‘sophisticated’ or ‘wholesale’ because they are deemed less vulnerable and therefore the law requires less regulatory disclosure.”
“the median price of financial advice has climbed and thousands of financial planners have left the profession. That has left many Australians stranded without affordable guidance during a cost-of-living crisis, and with the impending retirement of millions of Baby Boomers.
In fact, more than 500,000 Australians have been ‘sacked’ by their financial advisers in recent years, says Angus Woods, the executive director of Advisor Ratings, a searchable database of registered financial planners.
“This issue stems more from industry challenges than ethical ones, largely due to stringent government legislation introduced after the [banking] royal commission,” he says.
“These regulations aimed to protect consumers from poor advice but have inadvertently led to nearly half of the advisers leaving the profession or focusing only on wealthy clients.”
The median financial advice fee last year was $3960, up 7 per cent on the year before, Adviser Ratings research shows. Over the past five years, fees have risen nearly 60 per cent. Separate analysis by Investment Trends finds the average fee for ongoing advice, which generally includes more detailed investment management and regular check-ups, increased 18 per cent in 2023 to $4700. Upfront fees – what you pay to sign up and get a statement of advice – rose 25 per cent to $4000.
Woods says some advisers have decided to let go of lower-fee clients to stay profitable. Others are focused on investors classified as ‘sophisticated’ or ‘wholesale’ because they are deemed less vulnerable and therefore the law requires less regulatory disclosure.”
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