Advice firm penalised $11m over ‘cookie cutter’ advice
Financial advice firm DOD Bookkeeping has been penalised in the Federal Court for providing ‘cookie cutter advice’ to clients.
DOD, formerly known as Equiti Financial Services, was penalised over $11 million on 24 April after the Federal Court found it breached conflicted remuneration rules.
Equiti FS provided financial advice to clients and offered SMSF establishment and administration services.
In the case of 12 clients who gave evidence to the court, the advice was “cookie cutter” and failed to take into account each client’s individual circumstances or objectives.
Equity FS paid $130,250 in bonuses to three financial advisers who provided template advice to clients to roll over their superannuation into self-managed super funds (SMSFs) and use those funds to buy property through a related entity, Equiti Property Pty Ltd.
Bonuses were paid when the clients settled on the property and these influenced the advice they provided, Justice Scott Goodman said.
ASIC deputy chair, Sarah Court, said: “Misconduct exploiting superannuation savings is an ASIC enforcement priority. In this case, the court found bonuses paid to advisers influenced the advice they provided, resulting in poor financial outcomes for the consumers involved.
“Financial services licensees who employ advisers to provide personal financial advice need to ensure that they place their clients at the forefront.
“The size of today’s penalty demonstrates the seriousness of this misconduct.”
Equiti FS’ Australian Financial Services Licence was cancelled by ASIC on 7 November 2024.
AUTHOR
Laura Dew
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