In its latest circular, the ombudsman revealed it had identified a number of FOS disputes that were all related to the conduct of a single authorised representative.
“The disputes appeared to raise similar issues relating to the classification of the customer’s investment style and the appropriateness of advice the authorised representative had provided,” said FOS.
Due to the number of disputes involving that one adviser, FOS wrote to the unnamed financial services provider (FSP) in question to alert them of a “possible systemic issue”.
“We told the FSP that the issue we considered to be possibly systemic was whether it had appropriate measures in place to comply with its obligations under section 912A of the Corporations Act and ASIC Regulatory Guide 104.70, and if not, whether any other investors had been affected as a result,” the ombudsman said.
After an internal audit, the FSP identified a number of clients who “had potentially received inappropriate advice”, said FOS.
“The FSP sent letters to potentially-affected clients inviting them to lodge a claim with the FSP,” the ombudsman said.
“Given that the FSP determined that the conduct of the AR gave rise to the possibility of inappropriate financial advice having been provided to a wider group of customers, we considered the matter was a definite systemic issue.”
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