ifa understands Russell Medcraft, founder and chief executive of Financial Choice, is a close relative of ASIC chairman Greg Medcraft.
The infringement notice penalties, totalling $21,600, relate to emails the company sent to around 215,000 consumers in 2016 which “falsely stated” that Financial Choice had been asked to conduct a survey on behalf of their super fund, according to ASIC.
ASIC also found misrepresentations relating to Mr Medcraft’s website findmysuper.com.au, which the regulator believes also misled consumers into believing they required Financial Choice’s services to find their missing super and maintain contact with their super fund “while overseas”.
As a result of ASIC’s concerns, Financial Choice has agreed to “stop sending communications that state or imply that Financial Choice is seeking consumers’ opinions because superannuation funds have asked it to do so; and removed the misleading statements from the Find My Super website” according to ASIC.
In March Spring Financial Group announced it will acquire Financial Choice in a deal that would bring its funds under advice to $850 million.
Mr Medcraft will take an executive position with Spring FG post-acquisition.
Russell Medcraft is one of the largest Roboadvice firms in the country, ASIC has always left Roboadvice off their radar, [b]now we know why.[/b] Suggest the Federal Police issue an arrest warrant immediately fro Greg Medcraft “Please Explain”
genuine question: If an adviser from this day forward is punished for anything other than fraud/theft, can their legal team utilise this as precedent to show the maximum punishment allowed on a case involving 215,000 consumers via false and misleading information?
Unbelievable! If this had been a small adviser they would have been banned but yet another big insto getting off with a small slap on the wrist by ASIC and the exec (who happens to be a relative) having no personal responsibility or recourse. Usual double standards by ASIC. A $21k fine would be nothing compared to what they made in profit from this purposely constructed false advertising.
It may well have been an educated risk. Write that $21,000 off as advertising…
Must be good to be self licenced .Asic are hounding the bank dealer groups , but this has popped up . Obviously someone had dobbed them in and ASIC had to act ????HMMMM
I was under the belief that ‘false and misleading representations’ was a serious breach of Corporation Law. Why is Mr Medcraft not disqualified for life and customers mislead by him not fully compensated? I bet he made more than $21k from his poor behaviour
it depends on who is doing the false and misleading if you are someone’s cuz it don’t matter
Are you referring to false and misleading representations about licensed advisers being untrustworthy and accountants being “ethical”? If Medcraft had to compensate all the unnecessary fees paid for SMSFs recommended by “ethical” accountants that would be an absolute fortune. And if the property market ever corrects, the compensation bill for all those negatively geared property investments recommended by “ethical” accountants will be astronomical.
Oh, you mean the other Medcraft.
we need better representation [b]NO![/b] not the FPA or AFA
Yep…. However with property not being a financial product those Accountants/Property Spruikers will simply fly off into the sunset with their bag full of cash while everyday Australians are left suffering. Grinds my gears and you see it everyday.
$21,000 fine..WTF?. $850 milion FUM, probably making $6 million to $8 million in re-occuring revenue and they get fined $21,000. $21,000 is just an acceptable business cost at that level. A bit like me being fined $2 for speeding or swearing in the comments section of IFA Mag. If an Forgets to turn off the fees during the opt in process it’s $50,000. what a joke of a penalty. You could just pass that fine off as a bribe in some countries. Might just do a few of those things myself if that’s the only risk, considering the upside.
Yep, no comparison in the different levels of culpability yet the difference in the amount of the fine is massive. $50K for a simple error that in most cases would only deliver a small benefit to the adviser, yet engage in a massive false and misleading campaign that wouldve generated significant revenue and you cop a fee that is 60% lower than for breaching opt-in.
And then you get a guy who is permanently banned from providing advice because he breached the BID for one client (based on what’s been made public). Advice that the clients are allegedly happy and comfortable with. It’s just crazy.
What recourse do I have on the advice I received about setting up an smsf with this guy?
Amazing that they never had a conversation about false and misleading conduct given unsolicited emails to 215000 consumers stating they were writing on behalf of their super fund. This bloke gets nailed and jailed if he’s anyone else. Typical ASIC treating their own as more equal than the rest of us.
Oh brother were art thou….??
seems eerily similar to a little ATO case that’s happening at the moment …
Wow how Amazing! If it wasn’t for old mate Medcraft being the Chairman of ASIC that website and all it’s advisers would have been handed a $1 Million dollar infringement notice, had their offices raided by ASIC and the federal police, they all would have been permanently banned from the financial services industry, taken to court and convicted as criminals then have their names publicly announced and their careers ruined for the rest of their lives.
Not Fair. His [b]Cuz[/b] should be banned too like everyone else. Why has this guy been spared. he should be ripped to shreds
so true. justice in australia is dependent on who you know, if this guy was a small adviser her would have been ripped to shreds, crucified, named and shamed then kicked in the guts again and again until he was unemployed and his reputation in tatters and his family and personal life ruined. i thought everyone was equal before the law, not so it seems
Shows poor judgement again by the head of ASIC.