Findex responds to ASIC ‘independent’ penalty

Financial advice group Findex has responded to ASIC’s decision to penalise the firm for using the words ‘independent’ and ‘non-aligned’ on its website, saying it had only intended to describe its ownership structure, not mislead clients.

Yesterday, the corporate regulator announced that Findex Group Limited and Financial Index Australia (FIA) had each paid a $10,800 penalty after receiving infringement notices for “inaccurately” claiming they were independent and non-aligned.

A Findex spokesperson told ifa that the company had only described itself as ‘independently-owned’ and 'non-aligned' in order to convey that its business is majority owned by management and staff, and not by a bank or other financial institution.

“Once notified by ASIC that the use of these terms for this purpose was not permitted under the Corporations Act, Findex began to remove the terms and issued a corrective statement on its website. FIA also reissued its Financial Services Guide to the relevant clients,” the spokesperson said.

“We believe that we had addressed ASIC's concerns in December 2015. In August 2016, ASIC issued two infringement notices and we have agreed to pay the notices of $10,800 each, bringing closure to this matter.

“We note that an infringement notice is not an admission of guilt or a finding and we did not intend to mislead or deceive clients as a result of using these terms.”

The spokesperson added that ASIC’s decision raises questions for the industry around whether the term can continue to be used, for example, in association names and industry conferences. 

Yesterday, ASIC said it was concerned that Findex’s use of the words ‘independent’ and ‘non-aligned’ may have led consumers to believe the services were conflict-free.

The services being offered were likely to have been affected by commissions or other benefits received from the issuer of recommended financial products. There were also conflicts of interest arising out of Findex’s associations or relationships with issuers of financial products, ASIC had said.

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