RI Advice to pay $6m penalty
The Federal Court has ordered RI Advice Group to pay a $6 million penalty for failing to take reasonable steps to ensure that its authorised representative, John Doyle, provided appropriate financial advice, acted in his clients’ best interests and put clients’ interests ahead of his own.
The Australian Securities and Investment Commission (ASIC) said that Doyle, a former financial adviser and authorised representative of RI Advice, was ordered to pay an $80,000 penalty after he inappropriately advised clients to invest, and stay invested, in complex structured financial products.
Further to that, Doyle received upfront and ongoing commissions for each of his clients’ investments in the structured products.
The conduct of RI Advice and Doyle was used as a case study for 'bad advice' during the Hayne Royal Commission.
The regulator said Doyle had admitted the allegations against him.
Justice Moshinsky of the Federal Court found that RI Advice, an Australian financial services licensee, lacked adequate processes to identify when advisers were avoiding internal advice quality checks or were recommending non-approved financial products.
Until its acquisition by IOOF in 2018, RI Advice was an ANZ financial advice business.
ASIC deputy chair, Sarah Court, said ‘These complex products were not suitable for Mr Doyle’s clients, many of whom were approaching retirement. RI Advice should have been properly monitoring Mr Doyle’s advice to ensure he was complying with the law.
“The $6 million penalty handed down by the Court against RI Advice sends a strong message to financial services licensees to properly monitor the advice given by their advisers to make sure consumers are protected.”
Recommended for you
With Fortnum Private Wealth and Professional Financial Services now unified under the Entireti umbrella company, CEO Neil Younger has detailed to Money Management the firm’s new direction and future expansion.
The FAAA has suggested looking offshore for overseas financial advisers to ease the adviser shortage, but are employers willing to take on the burden of workplace visas?
There may be a huge influx of alternatives coming to the market, but timing and access difficulties mean advisers can easily end up disappointed with their selection, according to Morningstar global CIO Dan Kemp.
An NSW individual has pleaded guilty to one criminal charge of providing unlicensed financial services after promoting crypto investments at national seminars.
