Advice firm fined $100,000 for false details
Fong Financial Planners has been convicted and fined $100,000 in the District Court of Western Australia on three counts of dishonest conduct that put their clients’ life insurance coverage at risk.
The Perth company had pleaded guilty to the three charges in March after the Australian Securities and Investments Commission (ASIC) referred the matter to the Commonwealth Director of Public Prosecutions.
An ASIC media release last week said Fong Financial Planners acted dishonestly by recording information it knew to be false on forms submitted to AMP as part of client insurance applications between September 24 and December 18 2014.
The advisory firm was an authorised representative of AMP during that time.
“Fong Financial Planners intentionally failed to disclose all relevant information relating to the personal circumstances of the clients, including details of their health and medical history,” the ASIC statement said.
“The incomplete disclosure of the information by Fong Financial Planners meant the duty of disclosure owed by the clients to the insurer had not been met and they risked not being covered by AMP policies.”
The ASIC media release says Judge Felicity Zempilas in her sentencing noted that there was a “degree of persistence” in the conduct and that the offending involved repeated breaches of trust in relation to separate clients who had relied on the advisory.
Judge Zempilas also considered the significant and unjustifiable risks to the clients had they been required to make a claim under their insurance policies, and the particular relevance of general deterrence for offences of this nature.
But she also took into account mitigating factors, including Fong Financial Planners’ early guilty pleas and low risk of reoffending since ASIC had permanently banned its sole director, David Fong, in 2017.