No one disputes that the Hayne Royal Commission into misconduct in the financial services industry had a significant impact on the financial planning and investment advice industry in Australia. The dispute is if it has had a net positive or negative overall impact. this month we’ll have a quick look at both sides of the coin. 

One of the negative impacts of the Royal Commission for CFPs was the removal of grandfathered conflicted commissions, which meant that financial advisers could no longer earn commissions on products they recommended to their clients. This resulted in a decrease in revenue for many financial advisers who had to rely on fees for their services.

Another negative impact for CFPs was the requirement for all advice fees to be renewed annually, which added a time-consuming and administratively burdensome process for financial advisers. The introduction of a new disciplinary system for financial advisers also resulted in an increase in the number of financial advisers being investigated and disciplined.

The loss of public trust was another negative impact of the Royal Commission. It exposed several cases of misconduct by financial advisers, resulting in a loss of public trust in the financial advice industry. As a result, many CFPs faced challenges in their businesses, such as reducing fees and laying off staff.

The impact of the Royal Commission on the number of CFPs in Australia was significant, with the number of CFPs in Australia still plummeting and leaving tens of thousands of Australians without access to affordable advice. The loss of public trust in the financial advice industry, new regulations such as the removal of grandfathered conflicted commissions, and the increasing cost of compliance have all contributed to this decline.

However, the Royal Commission also had some purported positive impacts on the financial advice industry. It led to increased scrutiny from regulators, increased demand for independent financial advice, a shift towards fee-for-service models, and a focus on providing high-quality advice. The changes brought about by the Royal Commission are expected to make the financial advice industry more transparent and accountable in the long run, ultimately benefiting consumers.

However you look at it, the Hayne Royal Commission continues to have a significant impact on the financial planning and investment advice industry in Australia. While it had a significant impact on the number of CFPs, the changes brought about by the Royal Commission are expected to benefit consumers in the long run. The financial advice industry will continue to evolve and adapt to these changes in the coming years.