RI Advice handed $6m fine

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.