Over the past 10 years, there have been many financial scandals in the financial advice industry, which has caused substantial losses for investors. Large wealth institutions controlled by major Australian banks have significantly contributed to investor losses by promoting their products which were not always in the best interests of clients. The aim of this study was to explore
In Australia, there are over 20,000 financial advisers, with only 1% registered as independent financial advisers. This study investigates why there has been no significant transition to independent advising. The importance of the study is underlined by the substantial losses suffered by thousands of consumers from advice that has been found to be influenced by conflicts of interest. Using a qualitative technique, the study undertook exploratory semi-structured interviews among financial advisers. The study found that over 90% of privately owned advisers will not be transitioning to independent advising due to the belief that clients will not pay fees for insurance advice. The study finds strong evidence that the affordability of paying fees for insurance advice arguably outweighs the conflicts of interest associated with non-independent insurance advice.
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