Count Financial class action dismissed

Count Financial has successfully defended itself against a class action which was filed in 2020 alleging it failed to ensure financial advisers were acting in their clients' best interests.

The case has been before the court for just shy of five years, with Justice Halley officially determining to dismiss the proceedings and ordering the applicants to pay Count Financial's costs.

Piper Alderman launched the proceedings on the back of Count Financial's misconduct revealed in the Royal Commission and alleged it contravened obligations owed to clients when taking commissions from product issuers or clients.

Piper Alderman alleged Count Financial failed to ensure that its advisers were acting in their clients' best interests and prioritising their clients' interests when giving personal financial advice and receiving commissions and/or benefits.

Further, the class action alleged advisers charged some clients ongoing service fees in circumstances where they did not provide them any ongoing service.

The Federal Court determined that Count had systems in place to enable it to monitor compliance by Count advisers with their statutory and regulatory obligations relating to the terms of the Total Financial Care Agreements.

In addition, Justice Halley found that Count did not have widespread significant failings in its advice business relating to "fees for no service" conduct.

However, Justice Halley acknowledged commissions were paid in exchange for advice given in connection with the acquisition of relevant products, and that Count did have distribution agreements in place to promote, market and sell some products.

Count Financial was a subsidiary of Commonwealth Bank (CBA) until October 2019 when it was acquired by CountPlus. CBA has acknowledged the court's decision to dismiss the case.

CBA had provided an indemnity to CountPlus of $300 million for the conduct that occurred prior to and after the acquisition.