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ASIC fines Financial Choice

ASIC has handed down a $21,000 penalty to self-licensed firm Financial Choice for false and misleading representations.

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newsJuly 25, 2017By 20 comments
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ifa understands Russell Medcraft, founder and chief executive of Financial Choice, is a close relative of ASIC chairman Greg Medcraft.

The infringement notice penalties, totalling $21,600, relate to emails the company sent to around 215,000 consumers in 2016 which “falsely stated” that Financial Choice had been asked to conduct a survey on behalf of their super fund, according to ASIC.

ASIC also found misrepresentations relating to Mr Medcraft’s website findmysuper.com.au, which the regulator believes also misled consumers into believing they required Financial Choice’s services to find their missing super and maintain contact with their super fund “while overseas”.

As a result of ASIC’s concerns, Financial Choice has agreed to “stop sending communications that state or imply that Financial Choice is seeking consumers’ opinions because superannuation funds have asked it to do so; and removed the misleading statements from the Find My Super website” according to ASIC.

In March Spring Financial Group announced it will acquire Financial Choice in a deal that would bring its funds under advice to $850 million. 

Mr Medcraft will take an executive position with Spring FG post-acquisition. 

Comments (20)

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  • Bob Wednesday, 26 July 2017
    Russell Medcraft is one of the largest Roboadvice firms in the country, ASIC has always left Roboadvice off their radar, now we know why. Suggest the Federal Police issue an arrest warrant immediately fro Greg Medcraft "Please Explain"
    2
  • Anonymous Wednesday, 26 July 2017
    genuine question: If an adviser from this day forward is punished for anything other than fraud/theft, can their legal team utilise this as precedent to show the maximum punishment allowed on a case involving 215,000 consumers via false and misleading information?
    3
  • Anonymous Tuesday, 25 July 2017
    Unbelievable! If this had been a small adviser they would have been banned but yet another big insto getting off with a small slap on the wrist by ASIC and the exec (who happens to be a relative) having no personal responsibility or recourse. Usual double standards by ASIC. A $21k fine would be nothing compared to what they made in profit from this purposely constructed false advertising.
    3
    • Anonymous Wednesday, 26 July 2017
      It may well have been an educated risk. Write that $21,000 off as advertising...
      3
  • Anonymous Tuesday, 25 July 2017
    Must be good to be self licenced .Asic are hounding the bank dealer groups , but this has popped up . Obviously someone had dobbed them in and ASIC had to act ????HMMMM
    2
  • Ian C Tuesday, 25 July 2017
    I was under the belief that 'false and misleading representations' was a serious breach of Corporation Law. Why is Mr Medcraft not disqualified for life and customers mislead by him not fully compensated? I bet he made more than $21k from his poor behaviour
    5
    • Anonymous Tuesday, 25 July 2017
      it depends on who is doing the false and misleading if you are someone's cuz it don't matter
      21
    • Anonymous Tuesday, 25 July 2017
      Are you referring to false and misleading representations about licensed advisers being untrustworthy and accountants being "ethical"? If Medcraft had to compensate all the unnecessary fees paid for SMSFs recommended by "ethical" accountants that would be an absolute fortune. And if the property market ever corrects, the compensation bill for all those negatively geared property investments recommended by "ethical" accountants will be astronomical.

      Oh, you mean the other Medcraft.
      0
      • Anon Tuesday, 25 July 2017
        we need better representation NO! not the FPA or AFA
        0
      • Anonymous Wednesday, 26 July 2017
        Yep.... However with property not being a financial product those Accountants/Property Spruikers will simply fly off into the sunset with their bag full of cash while everyday Australians are left suffering. Grinds my gears and you see it everyday.
        1
  • Anonymous Tuesday, 25 July 2017
    $21,000 fine..WTF?. $850 milion FUM, probably making $6 million to $8 million in re-occuring revenue and they get fined $21,000. $21,000 is just an acceptable business cost at that level. A bit like me being fined $2 for speeding or swearing in the comments section of IFA Mag. If an Forgets to turn off the fees during the opt in process it's $50,000. what a joke of a penalty. You could just pass that fine off as a bribe in some countries. Might just do a few of those things myself if that's the only risk, considering the upside.
    3
    • Jimmy Wednesday, 26 July 2017
      Yep, no comparison in the different levels of culpability yet the difference in the amount of the fine is massive. $50K for a simple error that in most cases would only deliver a small benefit to the adviser, yet engage in a massive false and misleading campaign that wouldve generated significant revenue and you cop a fee that is 60% lower than for breaching opt-in.

      And then you get a guy who is permanently banned from providing advice because he breached the BID for one client (based on what's been made public). Advice that the clients are allegedly happy and comfortable with. It's just crazy.
      0
  • Chops Tuesday, 25 July 2017
    What recourse do I have on the advice I received about setting up an smsf with this guy?
    3
  • Matt Tuesday, 25 July 2017
    Amazing that they never had a conversation about false and misleading conduct given unsolicited emails to 215000 consumers stating they were writing on behalf of their super fund. This bloke gets nailed and jailed if he's anyone else. Typical ASIC treating their own as more equal than the rest of us.
    3
  • Anonymous Tuesday, 25 July 2017
    Oh brother were art thou....??
    1
  • mike Tuesday, 25 July 2017
    seems eerily similar to a little ATO case that's happening at the moment ...
    4

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