Connect Financial Service Brokers CEO Paul Tynan has flagged his concerns over what he says are “millions of Australian consumers” who have no access to professional financial advisers.

The situation is evolving into a consumer crisis and is the result of over-regulation and industry self-interest, he says.

“If this scenario wasn’t bad enough, the Hayne royal commission recommendations that facilitated the introduction of retrospective legalisation served to compound the crisis by accelerating the increase of orphan customers right across the financial services industry,” Mr Tynan said.

Orphan clients are policyholders that were originally sold to and serviced by a financial planner and that planner is no longer in the industry.

He says the Hayne royal commission highlighted payments of ongoing commission for no service but points out it was “all one-way and failed to properly understand and appreciate the historical and commercial reality of the design of a financial product”.

“The Hayne royal commission has resulted in more regulation and over compliance which has seen costs to the customer reach record levels, the number of advisers’ plummet to 15,000 and consumers unable to access and afford advice in an era of legislative and regulatory complexity,” Mr Tynan said.

“At the centre of this perfect storm were the self-interest groups and their fanatical obsession and belief that commission based remuneration structures created a conflict-of-interest situation.”

He says it’s both an indictment and one of the darkest of chapters in Australia’s economic history that so many “orphan customers” now sit in products without access to much needed personal/professional advice.