Advice Under Attack – Again

Financial Newswire Contributor

27 January 2026

OPINION

The advice profession generally, and managed accounts specifically, have come in for criticism over the past two weeks in the AFR.

The AFR is normally measured and well researched but this is a pretty inflammatory opinion piece. Words and phrases like “dodgy selling”, “conflicted pay models are thriving”, “clean up their act” “a scandal waiting to happen” “funnelled by advisers” “unscrupulous operators pop up” and conflating Shield and First Guardian with reputable advice and managed accounts all aim to suggest that the advice profession is heading for disaster and should be the subject of another Royal Commission.

You’d think there was an agenda at play – but whose isn’t obvious.

It’s true that the unwillingness of the Government to address the definition of “wholesale investors” is a gaping hole in the regulatory regime. “Wholesale” and “sophisticated” are used interchangeably, but no mind. But the implication that wholesale and sophisticated investors are lambs to the slaughter is unsubstantiated. Wild accusations that the government has “sided with startups and fund managers concerned about the impact on flows” is the type of writing you’d expect from a high school essay not an opinion piece in the AFR.

I’d take exception if I was the Minister.

It’s easy to dismiss these articles as just noise but they demand a response because they come at a time when the managed account area is under formal review by ASIC. They contain:

• Unsubstantiated assertions about conflict
• No mention of the ban on Conflicted Remuneration together with implications that it’s being flouted
• No apparent understanding of fee disclosure requirements such as “clear client consent”
• No recognition of the dramatic improvement in professionalism that asset consultants and portfolio managers have brought to investor portfolios
• No examples of instances where client outcomes have been negatively affected, just “well it might go wrong” implications
• No recognition of the materially greater transparency of costs and holdings in managed accounts compared to unit trusts
• No mention of the fact that a Shield type disaster appears entirely absent in managed accounts and complaints to AFCA are virtually non existent

And incidentally they published IMAP data without permission.

How should we collectively respond?

Managed accounts are a clear example of the progressive improvement of Advice. But it’s a journey and we need continue to improve the way in which those improving outcomes are evidenced. For example;

• market-linked benchmarks for managed account models disclosed as part of the advice process – something that’s almost always missing from the old advice process – and
• good analysis of the actual outcomes which clients achieve – again something that the old advice process simply cannot deliver.

And we need to make the case, to the regulator, to clients, even to journalists, about how the systematic portfolio management approach which underpins the operation of managed accounts delivers better outcomes for clients than the traditional approach to advice.