The Federal Court found RI Advice Group Pty Ltd (RI Advice) 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.
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.
The Court also found RI Advice failed in their obligations as a financial services licensee.
The Court had previously made declarations that Mr Doyle had breached his best interests obligations by giving inappropriate advice and failing to put his clients’ interests first. At the time, Mr Doyle was an authorised representative of RI Advice.
ASIC Deputy Chair Sarah Court said ‘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. In some cases, Mr 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.’
The penalty hearing for RI Advice and Mr Doyle has not been set. A case management hearing will be listed for a later date.