SINGAPORE - A financial advisory firm found to have engaged into anti-competitive practices has failed in a bid to have a financial penalty reduced.
An appeal by IPP Financial Advisors seeking a substantial reduction in the financial penalty imposed by the Competition Commission of Singapore (CCS) has been dismissed by the Competition Appeal Board (CAB).
The original decision, handed down in March last year, had been the first of its kind made against a firm in the financial services industry.
The competition watchdog had found that IPP, along with nine other financial advisory firms, had infringed the Competition Act.
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The group of 10 firms were found to have engaged in an anti-competitive agreement in 2013 to pressure a competitor, iFast Financial, to withdraw its offer of a 50 per cent commission rebate on competing life insurance products on the Fundsupermart.com website.
The 10 companies had been hit with penalties totalling nearly $1 million. They were: Avallis Financial (previously known as First Principal Financial); Cornerstone Planners; Financial Alliance; Frontier Wealth Management; Jpara Solutions; Professional Investment Advisory Services (Pias); Promiseland Independent; Ray Alliance Financial Advisers; Wynnes Financial Advisers, as well as IPP Financial Advisers.
iFast's offer had disrupted the financial advisory industry as it used its online platform to reach out to its clients, allowing iFast to save on distribution costs.
However, iFast withdrew the Fundsupermart offer a few days after its launch owing to collective pressure from the parties.
Pias and IPP had received the highest penalties of $405,114 and $239,851 respectively.
IPP had appealed to the CAB, seeking a substantial reduction in the financial penalty imposed by CCS.
But after hearing the evidence of IPP's witnesses and the arguments of IPP and CCS, the CAB affirmed the earlier decision and dismissed all of IPP's grounds of appeal.
IPP was ordered to pay the original penalty sum with interest, as well as to pay CCS' legal costs.
Mr Toh Han Li, CCS chief executive, said: "The disruptive entry of a new competitor with an innovative offering would inevitably cause displeasure and outcry among the existing market players. However, market players need to decide their own individual competitiveresponse."
He noted that in this case, the firms had colluded to collectively pressure a competitor from withdrawing its innovative offering, preventing consumers from enjoying greater choice, convenience and more competitive prices.
"CCS will take thenecessary enforcement measures to allow new entrants to fairly compete with the existing market players on a level playing field, such that the marketbecomes more efficient, innovative and responsive to consumer's needs."