ASIC has announced that Findex Group Limited and Financial Index Australia Pty Ltd (FIA) have each paid a $10,800 penalty following the issuing by ASIC of infringement notices for potentially misleading claims on the Findex website.
Between August 2015 and December 2015, FIA published several representations on the Findex website referring to services provided by the Findex group as being ‘independent’ and/or ‘non-aligned’.
Under Section 923A of the Corporations Act, a company cannot describe its advice service or itself as “independent”, “impartial” or “unbiased” if all or part of the adviser’s remuneration (or the remuneration of a related body corporate or associate) is derived from the financial products it recommends, or if there is a relationship between the adviser and a particular product issuer.
ASIC was concerned about statements made on the Findex website that:
•a corporate member of the Findex group, Financial Index Wealth Accountants Pty Ltd, was one of Australia’s leading independent providers of retail financial planning, accounting and wealth management services; and
•the Findex group was ‘Australia’s largest independent financial advice company’.
ASIC was concerned the use of the word ‘independent’ and ‘non-aligned’ may have led consumers to believe services being offered by the Findex Group were unaffected by any conflict of interest, such as commissions, when in fact the services offered were likely to have been affected by:
•commissions or other benefits received from the issuer of recommended financial products; and
•conflicts of interest arising out of the group’s associations or relationships with issuers of financial products. An infringement notice was issued to Findex Group Limited for making the statements on behalf of the Findex Group.
A separate infringement notice was issued to FIA as the registered owner of the Findex website. Findex Group Limited and FIA responded to ASIC’s concerns by removing the offending statements from the website by December 2015.
