Royal commission fallout: ex ANZ adviser John Doyle taken to court by ASIC

A former ANZ adviser whose alleged misdeeds were exposed by the Hayne inquiry is being taken to court by ASIC.

John Doyle was employed by financial advice business RI Advice, then a subsidiary of ANZ. Picture: Hollie Adams

The corporate watchdog has commenced legal action in Federal Court against IOOF-owned financial advice business RI Advice and former financial adviser John Doyle, relating to evidence heard at the banking royal commission.

The Australian Securities and Investments Commission alleges RI Advice failed to take reasonable steps to ensure Mr Doyle provided appropriate advice, acted in clients’ best interests and put his clients’ interests ahead of his own.

RI Advice knew, or should have known, that there was substantial risk of Mr Doyle not complying with his obligations under the law and that he was repeatedly recommending structured products to his clients, bypassing compliance processes, ASIC alleges.

ASIC also alleges that Mr Doyle, an authorised representative of RI Advice through his Melbourne business Carrington Financial, gave inappropriate “cookie cutter” advice to retail clients to invest in complex structured financial products without taking into account their financial goals or risk tolerance.

ASIC is pursuing both RI Advice and Mr Doyle for multiple breaches of their obligations. It is yet to confirm the final figure but it would be “more than 10 contraventions for each party”, an ASIC spokesperson told The Australian.

Each contravention carries a maximum penalty of $1m for RM Advice and $200,000 for Mr Doyle.

“It’s an important proceeding not just because of its relationship to the royal commission, but because the provision of financial advice is subject to very important components of the Corporations Act, to protect consumers from bad advice,” ASIC deputy commissioner Daniel Crennan told The Australian.

“It exposes a very poor aspect of the financial advice industry, where individuals don’t even take into account what [a client’s] objectives or financial situation is. They’re having advice or products recommended to them that are wholly unsuited to their particular circumstances.”

At the time of the alleged misconduct, RI Advice was a subsidiary of ANZ. It was sold to IOOF in late 2018.

IOOF on Thursday acknowledged the action taken against the company.

“RI Advice was acquired as part of its acquisition of the ANZ Dealer Groups on October 1, 2018. The conduct which is subject to these proceedings occurred prior to the acquisition by IOOF.

“IOOF has previously highlighted the existence of contractual protections provided to IOOF in respect of certain pre-completion conduct,” a spokesperson said.

Despite ASIC investigating Mr Doyle’s actions in 2015, it never banned him as a financial adviser.

ASIC commenced a further investigation of Mr Doyle after the head of ANZ’s RI Advice group, Darren Whereat, gave evidence at the banking royal commission which exposed how ANZ offered large cash incentives to recruit financial planners, including Mr Doyle, before new legislation came into effect in 2013 that would have stopped the bank receiving lucrative ongoing commissions.

The bank offered Mr Doyle up to $150,000 to join the company in March 2013.

Among the evidence heard at the royal commission was that Mr Doyle pushed his clients, many of whom were retired, into complex and risky products that were not approved by RI Advice.

He was required by ANZ to sit an exam before he became an authorised representative of RI Advice, but he was not given the test – which he failed — until July 2013, three months after he started with the company.

Despite failing the exam, there was no evidence to suggest RI Advice ever increased its monitoring or supervision of Mr Doyle. He also earned the lowest possible mark on an internal audit, skewing the results across the entire business.

He was eventually suspended in 2015 but even then was allowed to continue servicing his more than 700 clients. A remediation program for his clients began after he sold his business, Carrington Financial, to a new owner in July 2016.

RI Advice in 2017 set aside $766,000 to compensate 222 of Mr Doyle’s clients. At the time of the royal commission, in April 2018, 29 clients had been compensated $415,000.