Why Is It Illegal to Give Financial Advice Without a Licence in Australia?

By Ben Northwood - Financial Advisor at Linea Wealth.

Imagine asking a friend to help you fix your car. They’ve watched a few videos, know a bit about engines, and seem confident. But when the repairs go wrong, you’re left footing the bill.

Now imagine the same scenario but with your financial future. That’s why Australia’s licensing laws exist: to protect people from well-meaning guesses and costly mistakes. When it comes to your finances, the difference between advice and licensed advice can mean the difference between security and stress.

What Counts as Financial Advice?

The Australian Securities and Investments Commission (ASIC) defines financial advice as any recommendation designed to influence your financial decisions.

That includes:

• Suggesting which shares, managed funds, or properties to invest in.

• Recommending how you structure your super or retirement plan.

• Advising on insurance or tax strategies based on your personal situation.

Even a casual “you should invest in this” from a friend or influencer can cross the line if it’s tied to your circumstances.

The moment someone tells you what you should do with your money — it’s advice. And in Australia, that means it must come from someone who’s qualified and licensed to give it.

Why Licensing Exists

Holding an Australian Financial Services (AFS) Licence or being an authorised representative of one isn’t red tape; it’s reassurance.

It means:

• You’re protected. Licensed advisers operate under legal and ethical standards, with strict oversight.

• You’re working with professionals. Advisers must complete ongoing education, training, and compliance checks.

• You have recourse. If something goes wrong, there are systems in place to hold advisers accountable.

Licensing is the safety net that turns financial advice from opinion into professional guidance.

When Advice Goes Wrong

At Linea Private Wealth, we often meet clients who come to us after receiving advice that was well-intentioned but poorly structured or, worse, unlicensed.

One client, Martin, a 52-year-old small-business owner, was sold a property “investment package” through a so-called adviser. The person claimed to offer wealth advice but was actually earning commissions on the properties they recommended. The result? A mismatched loan, tax headaches, and a property that didn’t align with Martin’s goals.

We helped restructure his portfolio, refinance his debt, and build a long-term strategy aligned with his business and family future, the kind of plan only a licensed adviser can legally and ethically provide.

The New Challenge: Online Advice and “Finfluencers”

Financial advice is no longer confined to offices: it’s on your phone, your feed, and your podcast queue.And while some online creators share valuable financial education, others blur the line between sharing insights and giving advice.

Recently, ASIC investigated several “finfluencers” who promoted specific shares and crypto projects to large audiences often without disclosing that they already owned those assets. When their followers bought in, prices briefly spiked, and the influencers sold for profit. This practice, known as “pump and dump”, is not only unethical, it’s illegal.

At Linea, we always remind clients: consider the motivation behind the message. Are they licensed? Are they accountable? If not, your protection is limited to none.

The Cost of Unlicensed Advice

Providing financial advice without a licence breaches Section 911A of the Corporations Act 2001 — and the consequences are serious:

• Fines of up to $133,200 for individuals and $1.33 million for corporations

• Potential imprisonment of up to five years

These penalties aren’t about bureaucracy they’re about protecting Australians from losing their savings to unqualified or conflicted voices.

Real People, Real Lessons

When Ellen, 38, came to us, she’d followed advice from an accountant who had suggested specific investments outside his scope. Though the accountant meant well, the portfolio wasn’t diversified and exposed her to unnecessary risk.

Through a licensed process, we rebuilt Ellen’s plan aligning her investments with her time frame, goals, and tolerance for risk. Her relief was immediate:

“For the first time, I understand why my money is invested the way it is and that it’s actually built around me.”

That’s what proper advice should feel like: clear, compliant, and personal.

How to Check if Your Adviser Is Licensed

Before you trust anyone with your financial future:

1. Visit the Financial Advisers Register (operated by ASIC).

2. Search their name or business.

3. Confirm they’re licensed and see their qualifications, authorisations, and any disciplinary history.

This one-minute check can protect decades of savings.

 

A Final Word from Ben

“Being licensed isn’t just a legal requirement, it’s a promise. It means every piece of advice we give is backed by education, oversight, and accountability. That’s how clients know they’re protected, and that their goals, not someone else’s gains come first.”

At Linea Private Wealth, we believe true financial advice is built on trust, transparency, and connection.If you’ve received guidance you’re unsure about, or simply want to start your wealth journey on solid ground, we’d be glad to help you find clarity and confidence: the Linea way.

Speak to a licensed Advisor today! Click to Book

This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is suitable for you and your personal circumstances.