Two advisers can hold the same qualifications, sit in similar offices, and give you a similar-looking plan — yet one is legally "independent" and the other is not. The difference is not marketing. In Australian financial advice, "independent" is a protected term, and understanding it tells you a lot about whose interests the advice serves.

What "independent" legally means

Under section 923A of the Corporations Act, an adviser (or firm) may only describe themselves as "independent", "impartial" or "unbiased" if they:
  • receive no commissions (or rebate any in full to the client);
  • receive no volume-based payments or other benefits from product providers;
  • charge no asset-based fees (a percentage of your funds); and
  • have no conflicts of interest or relationships that could reasonably influence their advice — such as being owned by, or aligned to, a product manufacturer.
ASIC actively polices this term. An adviser who takes life-insurance commissions or charges a percentage-of-assets fee simply cannot use the word — and if they do, they are breaking the law. So when a firm genuinely calls itself independent, it is making a claim it can be held to.

What "aligned" advice is

"Aligned" advice is not a slur — most Australian advice is aligned, and much of it is perfectly good. It means the adviser operates under a licensee (an Australian Financial Services Licence holder) that is owned by, or connected to, a larger financial institution, or that maintains an Approved Product List shaped by those relationships. An aligned adviser must still act in your best interests — the Best Interests Duty applies to everyone. But their product menu may be narrower, and their remuneration may include asset-based fees or insurance commissions that an independent adviser would not charge.

Why it changes the advice

The concern with alignment is not dishonesty; it is the subtle pull of incentives and defaults. If the easy, approved, well-remunerated option is an in-house product, that is the path of least resistance — even for a well-meaning adviser. Independence removes those pulls by design: no product owner, no asset-fee incentive, no commission. For straightforward needs, an aligned adviser at a reputable licensee may serve you well and cost less to get started. For complex situations — where you want maximum confidence there is no product bias — independence has obvious appeal. Neither is automatically "better"; what matters is that you know which one you are dealing with and why.

How to tell which you have

You do not have to take a website's word for it:
  • Read the Financial Services Guide (FSG). It must disclose ownership, relationships, and exactly how the adviser is paid.
  • Look at the fee model. Asset-based fees or retained insurance commissions mean the adviser is not independent under s923A, whatever the branding says.
  • Ask directly: "Are you independent under section 923A — no commissions, no asset-based fees, no product ownership links?" The answer should be immediate and unambiguous.
  • Check the licensee. Who holds the AFSL, and who owns them? An FSG or the ASIC register will tell you.

The bottom line

Independence is a verifiable standard, not a slogan. Aligned advice can be good advice — but the label "independent", when it is genuine, is one of the few signals in this market you can actually rely on. Either way, make the adviser show you how they are paid, and decide with your eyes open. For how the different fee models work, see how financial advisers are paid. --- Ready to compare? See independent financial advisers on CompareMyAgents → — sourced from advisers who meet the independence standard and checked on ASIC's register.