Financial Adviser

A financial adviser is a licensed professional providing personal financial advice, including recommendations on insurance products. Advisers must hold an Australian Financial Services Licence (AFSL) or be an authorised representative of an AFSL holder.

Professional requirements (post-Royal Commission reforms)

• Approved education qualifications (typically a relevant bachelor's degree).
• Pass a professional exam.
• Ongoing professional development.
• Adhere to the Code of Ethics (originally administered by FASEA, now under ASIC).
• Meet the best interests duty for personal advice.
• Maintain professional indemnity insurance.

What advisers can do

• Comprehensive financial planning: retirement, investments, taxation, and insurance.
• Insurance-only advice: focused on personal risk cover.
• Investment advice: focused on portfolio construction.

Personal advice obligations

When providing personal advice (recommendations tailored to your circumstances), advisers must issue a Statement of Advice (SOA) that explains:

• Their recommendations.
• The basis for the advice.
• Fees payable.
• Any conflicts of interest.

General advice vs personal advice

• Personal advice considers your individual circumstances and triggers the best interests duty and SOA requirements.
• General advice is factual information and education without considering personal circumstances. It triggers a General Advice Warning, not an SOA.

Advisers vs brokers

Financial advisers provide broader financial planning. Insurance brokers specialise in arranging insurance cover. Some professionals are licensed as both. Their AFSL authorisation specifies which products and services they can provide.