Australian Financial Planning is BROKEN
The Royal Commission uncovered that financial planning is broken in Australia. Recent changes have created brand new problems for financial planners and financial advice in Australia.
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I've personally had experience with conflicted financial advice for a family member's retirement planning. I'll outline some of the key issues that the Royal Commission outlined as problems with financial planning advice in Australia. Due to these changes, I'll outline the new financial advice problems. Then I'll talk about, "is a financial advisor worth it." and most importantly, who is best suited to consider the services of a financial planner. Finally, going through some fundamental principles, you should consider regardless of self-advising or using a financial planner if you are investing money in Australia.
For most Australians, financial advice is fairly boilerplate, which includes: spending less than you earn, paying down debt and having some savings, contributing to super more than your employer, estate planning, considering personal insurances, diversification, low-cost financial products and annual meetings with your planner for rebalancing / financial counselling.
The main problems of financial advisors were conflicted advice and a sales-focused culture. This lead to over-complicating of financial advice, the punishment of any wrongdoing is indirect, platforms encouraging cross-selling of deal groups own financial products and underperformance as a result of fees.
The new problems as a result of financial planning changes, there is a large exodus of financial planners, statements of advice are costing more money and becoming more complex (hiding disclosure in the complexity), and advice provided by product providers is growing.