The Australian Securities and Investments Commission (ASIC) has initiated Federal Court action against RI Advice Group and one of its former financial advisers, John Doyle, in a move directly related to the Royal Commission.
The regulator said that it is alleging that RI Advice failed to take reasonable steps to ensure that Doyle provided appropriate advice, acted in client’s best interests and put his clients interests ahead of its own as required by law.
ASIC said it was also taking action against Doyle alleging he gave inappropriate ‘cookie cutter’ advice to retail clients to invest in complex structured products called Macquarie Flexi 100 Trust and Instreet Masti 36 and 38 without taking into account their financial goals or risk tolerance.
ASIC alleges RI Advice knew, or should have known, that there was substantial risk Mr Doyle was not complying with his obligations under the law and was repeatedly recommending structured products to his clients, bypassing compliance processes. ASIC further alleges RI Advice did not take reasonable steps in response.
ASIC also claims RI Advice contravened general obligations as an Australian Financial Services Licence holder and is seeking compliance orders from the Federal Court to prevent similar contraventions occurring in the future.
The maximum civil penalty for contraventions alleged against RI Advice is $1 million per contravention. For Mr Doyle, the maximum civil penalty is $200,000 per contravention.