A new industry code for financial planners which scraps commissions in favour of transparent upfront fees does not go far enough, according to Alina Humphreys, senior associate at Maurice Blackburn.
Humphreys said a growing number of people had consulted the firm about "enormous financial losses by following the advice of a financial planner".
"What has become apparent is that there is a clear need to overhaul the current system, to ensure that buying financial products is separated from seeking financial advice," she said.
"The financial services industry has indicated that it acknowledges there is a need for greater transparency. The question that arises, though, is how can investors trust that this code will protect them, any more than previous codes?"
The introduction of the code by the Investment and Financial Services Association comes after the collapse of Storm Financial and Timbercorp.
A Financial Service Ombudsman Service report indicated that there had been a 117 per cent increase in complaints against financial advisers for the last six months of 2008 compared to the same period in the previous year.