Advice Files Show Rising Standards

Advice Files Show Rising Standards - advice quality index — Advice Files Show Rising Standards

A six-year compliance study of over 200 Australian licensees has shared how the volume of poor advice has changed over time and whether a demanding regulatory environment is paying off.

The Advice Quality Index

The Advice Quality Index from compliance firm Assured Support is an independent longitudinal benchmark for measuring the quality of advice which reviewed over 9,000 advice files. This index measures factors such as legal compliance, professional judgement, evidentiary support, client outcomes and advice effectiveness.

Between 2020 and 2026, the proportion of “very poor” reviewed files declined from 2.4 per cent to 0.3 per cent and “poor” advice declined from 18.5 per cent to 9.7 per cent. This brings the combined total to 10 per cent which the firm said is “impressive” given the demanding regulatory and compliance environment.

“Sound” advice – those advice files which meet the expected legal, professional and evidentiary standards – increased from 77 per cent to 88 per cent.

The report noted that reducing the volume of poor advice is not necessarily the same as increasing the volume of good advice. The first establishes a professional foundation while the second builds on that foundation by extending professional judgement, evidence, communication and client-centred standards.

“This improvement occurred in a complex, highly regulated profession that experienced sustained legislative, regulatory and professional change. Maintaining quality through that period would itself have been notable. Achieving a substantial reduction in advice assessed below the expected standard is a more significant achievement,” the report read.

“The principal achievement wasn’t an increase in Good or Exceptional advice. It was the sustained movement away from below-standard advice and into Sound advice. That shift represents the necessary foundation from which Good and Exceptional advice can be developed more consistently.”

Although no files were declared as being ‘exceptional’, Assured Support said this demonstrates the “deliberately demanding” threshold of that category. It suggests that the regulatory bar for top-tier service is set high and perhaps unreachably so for the average practitioner.

To move beyond the current baseline, licensees should target growth in the number of good and exceptional advice files as a separate capability objective. This means reviewing positive files to identify practices that can be reinforced across the business. They can also analyse recurring negative exceptions to understand why files may sit below the expected standard and whether corrective action would improve future advice quality and client outcomes.

“High-quality advice depends on more than governance. It requires capable, honest professionals who accept personal responsibility for their conduct and exercise sound judgement.”

“Effective governance supports those qualities by identifying negative exceptions requiring action, recognising positive exceptions worth reinforcing and ensuring that both contribute to better client outcomes.”

“Quality isn’t achieved through perfection. It’s achieved when capable, honest professionals operate within governance frameworks that encourage accountability, challenge and continuous improvement. Neither is sufficient without the other.”