The Federal Court has ordered RI Advice 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.
Additionally, Mr Doyle, a former financial adviser, was ordered to pay an $80,000 penalty after he inappropriately advised clients to invest, and stay invested, in complex structured financial products, ASIC confirmed in a statement on Thursday (3 February).
According to the corporate regulator, Mr Doyle received upfront and ongoing commissions for each of his clients’ investments in the structured products.
“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,” said ASIC deputy chair, Sarah Court.
“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.”
In delivering the ruling, Justice Moshinsky of the Federal Court explained that although RI Advice’s conduct was not deliberate and it had paid compensation to Mr Doyle’s clients, its breaches of the law were serious and sustained, and the monitoring flaws should have been apparent to RI Advice.
The court also found RI Advice failed in its obligations as a financial services licensee.
RI Advice was, until its acquisition by IOOF in 2018, an ANZ financial advice business.
a joke
[quote=Christopher T.]Vertical integration raises its ugly head again….and again…and again….at what stage is it knocked on the head?[/quote]
It has nothing to do with vertical integration. All industries and professions have use vertical integration to expand. IR obviously failed to canvass this person before allowing him to join IR.
I don’t think I ever read a positive comment on our industry on these threads and I’m exactly the same. Something has to be done. I received an SOA back from the paraplanner today that was 22000 words. You honestly think someone will read this. Paraplanner charged $1000. Ridiculous.
ANZ will be paying this bill, it’ll be all over the terms of sale. Doyle, what a bad egg.
The said inappropriate product must have been on the APL of RI for this determination. Is this adviser still with IOOF , gone to another AFSL , or done what a lot of advisers who don’t like being told what to do to be complaint do and apply for their own AFSL so they can be accountable only to their reflection in the mirror. At least RI provided compensation which is something many of these start up small AFSL will ever be able to do
this happened back in 2013-2015, adviser long gone
Non APL and dodged supervision multiple times. All clients remediated years ago. Retrospectively applied standards and scapegoat now found post RC….ASIC says “look what we did, we’ve protected the poor consumer”…absolute rubbish
When is ASIC going to have a look at the firms with their own licence? They seem to be left alone, with no supervision or compliance. They are probably the next wave. Had a client coming in last week, paid enormous fees and had no idea on how their money had been invested over the past 10 years. They could never see the adviser they said, only his assistant, adviser was too busy. In my first meeting with them, them told me they has learned more than over the past 10 years. These shameful practices are still continuing. No education will stop the greedy from ripping people off and giving our industry a bad reputation.
$80,000? What a joke. The adviser here is the main one at fault. Give him a proper penalty.
$6m is a big hit. Would close any other AFSL in the industry overnight given the waifer thin balances sheets outside the big two. Perhaps ASIC know what theyll find if they ever got serious about investigating the unresourced small players?
Unbelievable. Who did the due diligence before IOOF Purchased this group? I am concerned
Forget due diligence the guy in charge of RI at the time is now head of advice – go figure!
Vertical integration raises its ugly head again….and again…and again….at what stage is it knocked on the head?
Vertical integration? This reads as though this adviser was using complexed structured products?
On the real vertical intergration front I wonder if ASIC will now start looking at mid tier listed advice companies, one who only the other day purchased a large business to ram its house product into?
It’s vertical intergration that is the problem mate – all these structures product were on the APL and being pushed by the Group CEO’s – I used to work there and hence left years ago ..
so independent planners never used complex financial products?
The problem with “complex structured products” often isn’t the products themself but more the lack of understanding a lot of Advisers and even ASIC have of them.
I would suggest that this is a symptom of large licensee having no monitoring whatsoever of their ARs rather than vertical integration……doesnt sound like the products were OnePath (ANZ owned). Vertical integration is a scourge too though a slightly more subtle one mostly…..
Very much a One Path product – if it was outside APL – the adviser would be paying the $6 million fee not RI
I think you’ll find they were NOT one path approved products . – suggest you read the 168 odd pages in the Fed Court judgement from 2021 from Hon Fed Court Judge – Hon Mark Moshinsky.
Not sure Doyle will be voluntarily paying RI’s $6m fine !??
How is $80k a penalty? Would’ve earned more than that from comms/fees. What was the opportunity cost for the clients? How much did they lose? Slap on the wrist imo. Send the bloke to jail..and sack RI management that were RMs at the time.
The ANZ licensees have shamelessness pushed ‘in-house’ product through its advisers for years . It used to be One Path and now it is IOOF product.
This is the tip of the iceberg. Watch rhis space for more.
The only MDA product on the IOOF APL is guess what, their own portfolios! Why is that? This matter is a structured product so something different so I’d be interested to know what it is.
True
Explains why RI increased their adviser fees!
Is this the stuff from 2013-15?
Keep it simple and dumb it down people.
And still the head of RI is head of advice at IOOF.. ah the good ol’ boys club
Sure is a boys club at IOOF and the responsible personnel are all still there. Unbelieveable.