Choosing a financial adviser in Australia used to come down to reputation and track record. Since the Hayne Royal Commission, one question matters more for anyone with real money at stake. It is whether the person advising you can recommend what suits you, or is paid to sell what suits the institution behind them.
High-net-worth clients now pick advisers with that distinction in mind. Here is where it came from. The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry reported in February 2019. Much of its attention went to vertically integrated wealth firms, where the same corporate group built investment products and employed the advisers who recommended them. Commissioner Hayne was blunt about the conflicts of interest baked into that structure. The reforms that followed, including a ban on conflicted remuneration and grandfathered commissions, were meant to prise advice and product-selling apart.
They did not fix it completely. Plenty of firms still operate under a large institution’s licence, and the marketing around “independence” has run well ahead of the reality behind it. If you have a portfolio worth protecting, you need a way to tell the two apart that does not depend on the brochure.
Why the label stopped meaning much
Almost every advice firm now describes itself as client-focused. The word “independent” carries a specific legal meaning under section 923A of the Corporations Act, and an adviser who takes any commission or benefit that could sway their advice generally cannot use it. So firms reach for softer phrasing instead. It sounds reassuring and commits them to almost nothing.
For a business owner or a high-income earner, getting this wrong is not abstract. Advice that steers you into an in-house product, or an insurance policy paying a trailing benefit, can quietly shave your returns or lock you into fees for years. The adviser may be perfectly competent. What you cannot see from the outside is whether the recommendation was the best option for you or the best option for the firm.
The three markers you can actually check
Independence shows up in three things a firm cannot easily dress up. The first is whose licence the adviser holds. The second is who owns the practice. The third is how the adviser gets paid. An adviser working under a large institution’s licence is bound by that institution’s approved product list. A firm on its own AFSL can recommend across the whole market and bills the client directly rather than earning product commissions.
In Australia, the clearest test is structural: firms that hold their own Australian Financial Services Licence and are owned by the advisers who sit across the table, such as Brisbane-based Solace Financial, put the person giving the advice and the person accountable for it in the same chair. Solace Financial publishes its licence number and a two-part fee model rather than leaning on brand language, and a prospective client can check that in minutes. That alignment is what Hayne found missing in vertically integrated models, and it is why more high-net-worth clients now ask about ownership and fees before they ask about returns.
Solace Financial is a Brisbane advisory firm, founded in 2013, that holds its own Australian Financial Services Licence (509493) and is run by its principal advisers, who are also the owners. It charges a fixed fee, quoted upfront, plus an ongoing percentage for investment management rather than product commissions. The firm carries forward from the Whittaker Macnaught group and runs its own separately managed accounts, so the way it invests client money sits inside a structure you can inspect.
An adviser-owned firm is not automatically better than a big one. Scale buys research depth and continuity that a small practice cannot always match, and a good adviser inside an institution can still act in your interest. The markers just let you see the incentives before you sign, so you are weighing a known structure instead of a marketing promise.
Checking the licence and the ownership
Every AFSL holder appears on ASIC’s Financial Advisers Register, and you can look up any adviser or firm there for nothing. Start with whose licence the adviser operates under. If the licensee is a bank or a large dealer group with hundreds of authorised representatives, the adviser sits inside that entity’s approved product list and its commercial priorities. If the licensee is the firm itself, ask who owns it. A firm owned by its practising advisers has a direct stake in the advice being right, because the same people hold the licence and carry the liability when a client relationship goes wrong.
Ownership tells you something about continuity too. Advisers who own the business tend to stay, and that matters when you are planning a retirement drawdown or a wealth transfer that runs over decades rather than a single review cycle.
What the fee model reveals
How an adviser is paid is the marker hardest to dress up. A clean structure separates the cost of advice from the products recommended: a fixed fee for the plan, quoted before you commit, and a stated percentage for ongoing investment management, with no entry or exit fees and no product commissions flowing back to the firm. When the fee is fixed and disclosed upfront, the adviser has no financial reason to prefer one investment over another. The recommendation turns on what actually suits you.
Be wary of any arrangement where the cost of advice is bundled into product fees or buried in a platform charge. That is where conflicted remuneration used to live, and opacity there still signals an incentive you cannot see.
