Private equity-backed financial services group Findex has responded to ASIC’s enforceable undertaking (EU), saying the EU concerns only a small proportion of the client base and the notice period did not consider updated policies and procedures.
Yesterday ASIC announced it has accepted an enforceable undertaking from Findex after the regulator found clients of its Financial Index Australia (FIA) subsidiary were being transferred to more expensive products without sufficient reason.
FIA subsequently issued a statement to ifa explaining that the concerns outlined in the EU are confined to a small portion of the firm’s client base and are not a result of any client complaints.
“At no stage have there been any concerns about the security of client funds, or the way they have been invested or supervised. ASIC’s concerns predominantly relate to the fullness of the advice documentation process,” an FIA spokesperson said
“Clients accepted full disclosure on fees and our recommendations were supported by thorough research provided by external leading industry professionals with the aim of delivering quality outcomes for our clients; they are not dictated by price.”
According to the statement, the performance of the funds has generally been consistently above benchmark over the entire period that the recommendations were made.
“It is unfortunate that ASIC's notice period referred to in the EU did not take into account updated versions of FIA's policies and procedures,” the spokesperson said.
ASIC acknowledges in the EU that FIA had already implemented a number of its own initiatives to address most, if not all the deficiencies, prior to entering into the EU, the statement said.
“Our clients can be assured that their interests are FIA’s highest priority and if they have not already been contacted by us, then they are not impacted by the EU,” the spokesperson said.
Last year, Findex and FIA were penalised for using the terms '‘independent’ and ‘non-aligned’ on websites. Findex responded to the penalty claiming it was not the group's intention to mislead clients.
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