The Federal Court has found that RI Advice Group failed to take reasonable steps to ensure that its former financial adviser, John Doyle, provided appropriate advice to clients, acted in the clients’ best interests and put the clients’ interests ahead of his own, states ASIC.
A statement from the regulator says the Court found RI Advice, an Australian financial services licensee, “…did not have any adequate processes to identify when advisers were avoiding advice quality checks or recommending non-approved financial products. The Court said these were serious flaws which should have been apparent to RI Advice”.
ASIC states that the Court also found RI Advice failed in its obligations as a financial services licensee.
The commission adds the Court had previously made declarations that Doyle had breached his best interests obligations by giving inappropriate advice and failing to put his clients’ interests first. At the time, Doyle was an authorised representative of RI Advice.
…financial advice licensees need to understand that they can be .liable if their advisers do not act in the best interests of their clients…
ASIC Deputy Chair Sarah Court says that financial advice licensees need to understand that they can be liable if their advisers do not act in the best interests of their clients and do not prioritise their clients’ interests over their own.
“ASIC commenced this proceeding because of the harm caused to investors when advice is not appropriate,” she says, noting that in some cases, Doyle’s clients were retired, or approaching retirement.
“Licensees need to have proper systems and processes in place to monitor the advice given by advisers to make sure consumers are protected,” Court notes.
ASIC says the penalty hearing for RI Advice and Doyle has not been set. A case management hearing will be listed for a later date.
As background ASIC says Doyle was an authorised representative of RI Advice between May 2013 and June 2016 when RI Advice was owned by ANZ Banking Group. RI Advice is now owned by IOOF Holdings.
Herein lies the essence of the utterly flawed AFSL system in place. Bundling numerous advisers under one licensee (unless all working within one practice) is just ASIC being too lazy to monitor and regulate individual licensed advisers. Each adviser should be responsible for their own compliance with suspension or loss of their license being the punitive recourse. No other profession in this country and possibly the world has an utterly stupid disfunctional system as currently the case in Australian Financial Services.
Agreed
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