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.”
Comments
What a joke !
These kind of things should have been picked up firstly in an audit of the adviser files.
Secondly when, non-approved products appeared on the advisers commission statements, what were the back office staff of the Licensee doing when the commission entries appeared on adviser remuneration statements ?
Isn't it strange that the vast majority of recalcitrant advisers were AR's on an institutionally owned AFSL.
But good on the government for crucifying the whole industry/profession and giving those recalcitrant institutions a slap on the wrist.
No wonder its in so much disarray,.... with thousands leaving.
So here's an observation that I'm not sure any financial journalist has asked of ASIC in relation to the John Doyle case. In the ASIC media release on 2nd August 2021, it states that John Doyle worked at RI advice until June 2016. I've just searched John Doyle on ASIC's financial adviser register (https://moneysmart.gov.au/financial-advice/financial-advisers-register) and it states that John Doyle left RI advice in June 2016, as outlined by ASIC in their media release. What caught my attention though, was RI Advice was not the last licensee that John Doyle worked for. If this is the same John Doyle, then why haven't any financial journalists' probed a little further with ASIC? It's hardly Woodward and Bernstein research, just good old Google.
If I were a financial journalist, my questions would be, did RI Advice inform ASIC of the reason(s) for John Doyle being terminated?
If they did, when did they inform ASIC?
And if ASIC were informed at the time of Doyle being sacked, how did they allow him to continue to practice for another 18 months?
And the CEO of RI at the time and who was therefore responsible for the oversight failure is still working in financial services. In fact, he has since been promoted to head of advice for a behemoth organisation operating multiple AFSLs. Is it any wonder our profession (in many cases still an industry) is in such a mess...?
Add new comment