The Federal Court has dismissed a class action against Count subsidiary Count Financial, finding that it did not fail to act in client best interests.
In an announcement to the ASX after market closure on Tuesday night, Count said the subsidiary had successfully defended the claim and denied any wrongdoing.
The principal issue in the case was whether the financial advisers continued to receive commissions or rebates from product providers following the Future of Financial Advice reforms, and if they had contravened the best interests duty or constituted misleading or deceptive conduct.
The class action alleged Count Financial contravened its obligations under the Corporations Act by not ensuring their financial advisers breached their legal obligations to their customers, failed to ensure adviser remuneration was free from conflict, didn’t ensure Count advisers acted in their customer’s best interest, and didn’t ensure advisers provided services where fees were charged.
The court found Count Financial had not engaged in any misleading or deceptive conduct in contravention of the Corporations Act. Additionally, it did not have “widespread significant failings” related due fees for no service in this instance and there were systems in place to monitor compliance of its representatives.
When Professional Planner reached out for comment, Count said it would not be providing any further comment on the outcome.
Piper Alderman, who led the class action, did not respond to requests for comment by time of publication.
The applicant, Roslyn Hunter, who was the trustee of the Hunter self-managed superannuation fund, was criticised by Justice Halley in the court judgment.
Justice Halley wrote the claimant had a tendency to be “defensive, argumentative and exaggerate her alleged inability to understand the documents” she was provided.
“At one stage of her cross examination, when pressed on a particular issue, she responded that she was a ‘mother who’s just running a superannuation fund for her family’ and when confronted with specific disclosures of commission arrangements in documents that had been provided to her, she responded ‘that doesn’t mean anything to me’, they are ‘just facts and figures’,” the judgment said.
“I accept that Mrs Hunter had little financial experience but I am satisfied that Mrs Hunter, by reason of her work experience with the CBA [Commonwealth Bank] and her demeanour in the witness box, was an intelligent and capable person who would have had little difficulty understanding the documents with which she was provided by the applicant’s representatives, notwithstanding her testamentary protestations to the contrary.”
The case is a legacy issue for Count, as Count Financial was owned by big four bank Commonwealth Bank.
CountPlus (rebranded to Count in 2023) was founded in 2007 by Barry Lambert, who also started Count Financial before selling it for $373 million in 2011, which was later sold back in 2019 for $2.5 million.
Commonwealth Bank agreed to provide $300 million to cover remediation as part of the sale, which increased to $520 million in 2022.
Former Commonwealth Bank executive general manager of wealth management advice Hugh Humphrey was appointed in 2022, replacing Matthew Rowe who departed earlier in the year.
Rowe had spent the proceeding years reshaping Count Financial into a fee for service business after the Hayne royal commission banned grandfathered commissions.
Humphrey’s tenure at Count has seen the takeover of peer licensee Diverger to become one of the largest licensee owners in the country, finalising client remediation.
Around 91 per cent of Count advisers expressed satisfaction with the licensee, according to last year’s CoreData licensee research. The latest industry results are due to be presented at the 2025 Professional Planner Licensee Summit in the NSW Blue Mountains on 23-24 June.
