When looking for a financial planner, many Australians find themselves deciding whether to trust a familiar bank for financial advice or to look for an adviser who operates independently. Both options are legitimate, but each comes with its own structure, strengths, and limitations.
Looking more closely at how each model works can help you decide which style of advice better aligns with your expectations, long-term plans, and the level of personal attention you want.
Independent vs Bank-Affiliated Financial Advisers: What’s the Difference?
Choosing between these two models largely comes down to how you prefer to receive advice and how much choice you want when it comes to financial products.
- Bank-affiliated advisers work within a bank or large financial institution. Their recommendations usually come from an approved product list, giving you access to the bank’s services, systems, and support.
- Independent advisers must meet strict legal requirements under Australian regulation. They receive no commissions, offer no links to product providers, and avoid conflicts. They can recommend products from across the market.
That said, in recent years, the number of bank-affiliated advisers in Australia has fallen sharply. Major institutions have stepped back from providing personal financial advice following regulatory reforms, including the Royal Commission and higher compliance expectations.
This shift has reduced the presence of institution-linked advisers and contributed to an overall contraction in the number of advisers. As a result, more Australians now work with boutique or non-aligned practices rather than large banks, simply because fewer bank-based advisers remain in the industry.
This context matters when comparing the two models, as availability and accessibility have changed significantly over time.
A note on what “independent” really means
In Australia, being “independent” is not just a marketing term, it’s a formal legal classification for a financial planner. Under rules set by the Australian Securities and Investments Commission, an adviser can only describe themselves as independent if they:
- don’t receive commissions, volume-based payments, or other forms of product-linked remuneration
- are not influenced by product providers or ownership structures.
It’s also important to understand that not all non-bank advisers are legally independent. Some privately owned advisers may still operate under licensees or structures that restrict product choice. Independence is therefore about how advice is delivered, not just who owns the business.
In addition, in Australia, all licensed financial advisers, whether independent or bank-affiliated, must meet strict education, ethical, and best-interest obligations under national regulations.
Independent Financial Advisers
Many Australians look to independent advisers when they want guidance that isn’t shaped by a bank’s product list or internal priorities. Because independence is tightly defined in Australia, the advice you receive must come without outside influence.
Advantages of an Independent Financial Planner
Here are some of the benefits you can anticipate when working with an independent financial adviser in Australia.
- Wider product range: Instead of being limited to a single bank’s products, independent advisers can recommend whatever they believe suits you. If a better super fund or insurance option exists outside the bank, they can put it on the table.
- Fee transparency: Independent advisers charge fees directly instead of relying on commissions. This often provides clients with a clear picture of the costs associated with working with a financial adviser.
- Fewer conflicts: Because independent advisers aren’t tied to product issuers, they aren’t pushed to recommend certain products.
- More tailored strategies: Recommendations tend to be shaped around individual goals rather than preset packages.
- Greater choice for complex needs: Particularly helpful for clients with layered finances or long-term planning goals.
Disadvantages of an Independent Financial Adviser
While independent advisers offer substantial benefits, there are a few points to consider before deciding whether this model suits you. Much of this relates to Australia’s strict independence rules and the structure of fee-for-service advice.
- Limited availability: Only a small share of Australian advisers meet the legal standard for independence, so choices may be narrower in some areas.
- Higher upfront costs: Fee-based advice can feel more expensive when getting started, especially for clients used to commission-based models.
- Fewer bundled services: Independent firms do not offer the packaged products or integrated banking features that larger institutions provide.
- Insurance advice may cost more: The fee-only model can make risk advice more complex or costly for some households.
The shrinking number of bank-linked advisers also means many consumers now encounter independent or non-aligned firms by default. While this expands access to impartial advice, it also reflects a structural change in the market; i.e. banks have withdrawn from advice roles due to rising compliance costs and regulatory pressure.
This industry-wide shift has reduced the overall adviser pool, making it more challenging in some regions to find any adviser, whether independent or institution-based.
Bank-Affiliated Advisers
Bank-affiliated, or institution-linked, advisers remain a familiar choice for many Australians. Their advice is delivered within a large organisation, which shapes both the strengths and the limitations of this model.
Bank-affiliated advice may suit clients with simpler needs or those who prefer to stay within a familiar institution, but it offers less flexibility than working with an adviser who sources products across the market.
Regardless of ownership or structure, licensed financial advisers in Australia are legally required to act in their clients’ best interests. Understanding how an adviser is structured simply helps you assess how advice is delivered and where potential constraints may exist.
Advantages of Bank Affiliated Advisers
One benefit of a bank financial adviser is the institutional support structure available to these advisers. Banks offer established systems, internal research teams, and products that work neatly together.
For clients who already use the same bank for everyday banking, superannuation, or lending, this can create a sense of continuity. In addition, these advisers can also draw on the bank’s administrative resources, which may appeal to people who want everything managed in one place.
Disadvantages of Bank Affiliated Advisers
However, the available product range is typically narrower. Recommendations usually come from a bank-approved list, meaning the options presented may not reflect the broader market. This structure can also introduce incentives that favour certain products, potentially influencing the guidance a client receives.
Which Type of Financial Planner Is Right for You?
When deciding between independent and bank-affiliated advice, it helps to step back and think about how much flexibility you want, how involved you expect your adviser to be, and how comfortable you are with different advice models.
Over the past few years, tighter regulations and higher compliance costs have changed the shape of the advice industry. As a result, there are fewer bank-linked advisers than there once were, and availability can vary depending on where you live and the type of advice you’re looking for.
Independent advice may suit you if…
You’re looking for broader, more personalised holistic financial planning rather than help with a single product or decision. Independent advisers often work best for people who want advice that looks at the full picture not just a one-off event. This covers areas such as investments, superannuation, insurance, retirement planning, and estate considerations.
They also suit clients who value having access to a wide range of strategies rather than being limited to a small product set.
In addition, this option tends to appeal to clients who are comfortable paying clear, upfront fees and prefer advice that isn’t influenced by product providers, particularly when goals are complex or long-term.
Bank-affiliated advice may suit you if…
You prefer working with a familiar institution you already use for banking or lending, and you value the convenience of having multiple financial services under one roof. Some clients appreciate this simpler approach, especially when their needs are relatively straightforward or closely linked to their existing accounts.
That said, bank-affiliated advisers are now less common than they were in the past, which can affect availability, particularly outside major cities.
In practice, the right choice often comes down to how complex your situation is and how much flexibility you want as your circumstances change.
Is It Worth Paying for a Financial Planner in Australia?
Deciding whether or not to pay for a financial adviser is a personal decision. That said, for many Australians, it’s not necessarily the cost itself that’s the major factor in deciding whether to seek help, but how much the cost actually is.
While, at first glance, fees can seem high, many people find the value worthwhile. This is especially true when dealing with superannuation, retirement planning, complex investments, or life changes that carry long-term financial consequences.
A good wealth management adviser can help you avoid costly missteps, create structure around your goals, and provide guidance when decisions feel overwhelming. For this reason, many people decide that working with a financial adviser is well worth the costs.
Final Thoughts on Independent vs Bank-Affiliated Financial Advisers
As far as choosing between an independent financial planner or a bank-affiliated adviser, there is no universally “better” option. It’s really what is more appropriate for your goals, preferences, and expectations around advice, product choice, and transparency.
Understanding how each type operates puts you in a stronger position to choose the style of advice that fits your situation and future plans.
Sources:
Australia faces a shrinking pool of financial advisers, with no quick recovery in sight. Rainmaker Information. (2024, October 16). https://www.rainmaker.com.au/media-release/australia-faces-shrinking-pool-of-financial-advisers
Choosing a financial adviser. Moneysmart.gov.au. (n.d.-a). https://moneysmart.gov.au/financial-advice/choosing-a-financial-adviser
Financial advice costs. Moneysmart.gov.au. (n.d.-c). https://moneysmart.gov.au/financial-advice/financial-advice-costs
Ford, K. (2025, October 9). FAAA says ‘drastic intervention’ needed to bolster adviser numbers – IFA. https://www.ifa.com.au/news/36315-faaa-says-drastic-intervention-needed-to-bolster-adviser-numbers
O’Reilly, J. (2023, July 28). Is it worth paying for a financial advisor? (Australia Guide). Northeast Wealth. https://www.northeastwealth.com.au/resources/is-it-worth-paying-for-a-financial-advisor-australia-guide
RG 175 AFS Licensing: Financial Product Advisers-conduct and Disclosure. ASIC. (2024, November 21). https://www.asic.gov.au/regulatory-resources/find-a-document/regulatory-guides/rg-175-afs-licensing-financial-product-advisers-conduct-and-disclosure/
