On 24 March 2023, Fong Financial Planners Pty Ltd pleaded guilty in the Perth Magistrates Court to three charges of dishonest conduct while carrying on a financial services business.
In 2014, whilst serving as an authorised representative of AMP, Fong Financial Planners acted dishonestly by recording information it knew to be false on forms submitted to AMP as part of client insurance applications.
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. Had this information been disclosed by Fong Financial Planners, further medical assessments and questionnaires may have been requested by AMP and exclusions may have applied to some of the insurance policies.
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 under the relevant policies.
The matter was committed to the District Court of Western Australia for mention on 19 May 2023 to fix a date for sentence.
The matter is being prosecuted by the Commonwealth Director of Public Prosecutions following a referral from ASIC.
Background
Fong Financial Planners and its director, former financial adviser Mr David Fong, were initially each charged with 11 offences contrary to s1041G of the Corporations Act (21-311MR). The charges against Mr Fong and eight of the charges against Fong Financial Planners were discontinued following Fong Financial Planners’ pleas of guilty to the three charges above.
At the time of the offending, the maximum penalty for a company for engaging in dishonest conduct while providing financial advice and carrying on a financial services business was a fine of either $7,650,000, or three times the total value of the benefits reasonably attributable to the offence, or 10% of turnover in the 12-month period ending at the end of the month in which the offence was committed.
Editor's note:
On 19 May 2023, the matter was adjourned to 23 November 2023 for sentencing.