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RI Advice hit by $6 million penalty

By Mike Taylor3 February 2022

RI Advice Group has been ordered by the Federal Court to pay a $6 million penalty over an issue raised during the Royal Commission involving the provision of inappropriate advice by one of its authorised representatives.

The Australian Securities and Investments Commission announced today that the Federal Court has ordered RI Advice Group Pty Ltd 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.

It said Doyle, a former financial adviser and authorised representative of RI Advice, was ordered to pay an $80,000 penalty after he inappropriately advised clients to invest, and stay invested, in complex structured financial products.

Doyle received upfront and ongoing commissions for each of his clients’ investments in the structured products. Mr Doyle had admitted the allegations against him.

Commenting on the Federal Court penalty decision, ASIC Deputy Chair Sarah Court said “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.

“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.”

Justice Moshinsky of the Federal Court found that RI Advice, an Australian financial services licensee, did not have adequate processes to identify when advisers were avoiding internal advice quality checks or were recommending non-approved financial products.


Although RI Advice’s conduct was not deliberate and it had paid compensation to Mr Doyle’s clients, the Court said 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 their obligations as a financial services licensee.

RI Advice was, until its acquisition by IOOF in 2018, an ANZ financial advice business.

 

Mike Taylor

Mike Taylor

Managing Editor/Publisher, Financial Newswire


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