Advice quality improving, but ‘exceptional’ advice remains elusive

Advice deemed poor or very poor has fallen by more than half in the past six years, to just to 10 per cent of independently reviewed files, according to the inaugural Advice Quality Index published by Assured Support.

The Index analyses 9315 advice files reviewed between 1 July 2020 and 30 June 2026 and draws on a broader dataset of more than 24,614 files across more than 200 Australian licensees since 2015.

Poor advice fell from 18.5 per cent of reviewed files in 2020-21 to 9.7 per cent in 2025-26. Very poor advice fell from 2.4 per cent to 0.3 per cent, or about three files in every 1000 files reviewed.

Sound advice rose 11.2 percentage points, from 77 per cent to 88.2 per cent.

On the other hand, the analysis found good advice in 2.1 per cent of files in 2020-21 and 1.8 per cent in 2025-26. Exceptional advice never exceeded 0.2 per cent in any year covered by the Index, and there were no incidences recorded in each of 2020-21, 2024-25 and 2025-26.

Assured Support managing director Sean Graham says the advisers who scored highest are not necessarily those with the deepest resources behind them, and “one of the things I found really interesting in the data is that the best advisers are regional advisers”.

Advice on a continuum

The assessment framework scores every advice obligation on a continuum, rather giving it a pass or a fail.

“Depending on the type of advice that we’re looking at, you have up to 400 different observations, and each one of those is on a continuum, from you’ve done this really, really badly, or you haven’t done it at all, to you’ve done it very, very well,” Graham says.

Sound advice is the product of a file that generates no exceptions either way – it is more or less fully compliant, without going that extra mile.

“If you can comply with the law, which is hard… to do because it’s complicated, that’s sound advice, and you should be happy that you can produce sound advice because it’s very hard to do that at scale and consistently,” Graham says.

“Good advice is generally characterised by positive exceptions, which demonstrate the advice has gone above and beyond the minimum requirements.”

This happens when, for example, advisers take additional time to explain their advice and its potential outcomes – both good and bad.

“They take time to explain here’s the strategy; if this goes wrong, here’s how we’ll deal with that. If the markets tank, here’s the exit strategy. Most advisers don’t do that,” he says.

Graham says the differences are typically revealed very early in the advice process, and the index reflects the quality of the entire client file, not only the statement of advice.

“You look at the file notes, you look at the broader context. Does every client get the same four value funds and insurer, or [is the adviser] sitting down and going, ‘No, let’s build something for you. Your circumstances are different.’ That’s what gets you up into that good and exceptional advice.”

Graham says the step from sound to good includes the adviser’s ability to make an explicit link between the recommendation and the needs of the client.

“Good advisers communicate value by showing they understand, and by really going, ‘This is what it means to you. I’m going to recommend these products to you because these products will do this for you.’ Most advisers go, ‘You want to retire at 65, so here are the six products.’”

He says that kind of link is present most commonly in the advice provided by advisers in regional practices. Typically, such advisers say something like: “I’m going to run into my clients at the football, in the supermarket, whatever else, and if I stuff up, it’s not just embarrassing, I won’t hear the end of it. They’ll run me out of town.’”

Graham says he reviewed one adviser in regional Victoria whose statements of advice were “brilliant”.

“They were like reading novels, really contextual, really rich, really authentic,” he says. “And I said, how are you doing this, because I know you’re required to go through the paraplanner. And she said, yeah, I send it off to the paraplanner, it comes back, but I can’t give it to my clients because it doesn’t sound like me. It doesn’t have any of the stuff I know about them. So I spend about four or five hours rewriting every SOA.”

“And I said, ‘How do you hit your targets?’ And she goes, ‘I’m smashing my targets, because my clients know I know them. So they put more money in.’”

Standardised documentation across licensees works against the highly personalised, highly authentic advice that often leads to a good or exceptional rating, Graham says.

“You pick up an SOA in Perth, one in Tassie, they’re identical. There’s nothing that really reflects the client or the adviser or the value they’re bringing to bear on the relationship.”

The threshold for exceptional advice is absolute and does not move even as the rest of the advice reviewed improves, according to Graham. The additional work required to move into the good and exceptional ratings requires advisers and their businesses to do things that may not be revenue generating, so there’s a point at which the quality of the advice being delivered reaches an economic roadblock.

“It’s possible, but the issue is that most advisers don’t want to spend the time to issue exceptional advice because the trade-off’s not there,” he says.

Advisers who do reach the higher standards generally have restructured their economics around it. Licensee requirements are a further constraint.

“I’ve got to use my licensee’s template. I’ve got to follow their process. I’ve got to use their APL. So there are real limitations, structural limitations, on that capacity as well,” Graham says.

The report does not identify direct causes for the six-year improvement in advice quality, but Graham says the reduction in below-standard advice can be attributed down to education and qualification reforms, poorer advisers leaving the industry, the Code of Ethics and the growth of self-licensing. Assured Support’s data back to 2015 put poor and very poor advice nearer 30 per cent, he says.

“It took a long time for advisers to embrace being advisers and not product salespeople, and you can start to see that now,” he says,

“The last six years are showing the industry is getting noticeably better.”