Financial planning group AAA Financial Intelligence (AAAFI) entered voluntary administration in January following a determination by the Australian Securities and Investments Commission (ASIC) that it was in breach of AFSL rules and is yet to pass on some outstanding fees from relevant fund managers and insurers owed to former authorised representatives of its licence.
According to a letter from appointed administrator Lawler Partners to a former AAAFI adviser – obtained by ifa – the liquidators have “identified funds held on trust by the company for the purposes of meeting fees under relevant Authorised Representative Agreements”.
The letter, dated 26 June 2013, explains that the administrators are “still in the process of finalising the funds to be distributed”.
However, the letter also indicates that only claims that the administrators “have notice of and are admitted” will be considered, meaning that some former authorised representatives “will not, on present forecasts, receive payment in full of your claim”.
One former authorised representative, who has since joined an institutionally-aligned licensee and spoke to ifa on condition on anonymity, says that based on communications with the administrator, the total monies withheld is in the range of $800,000 to $900,000 from former advisers.
The former authorised representative said that while they had not personally sought legal advice about their own claim – which is of the “order of $10,000” – other former authorised representatives are in discussions about potential litigation or legal avenues to seek redress.
AAAFI had its licence cancelled on Thursday January 31. A subsequent communication from the Australian Securities and Investments Commission explained that the company had failed to ensure its advisers were properly trained in relevant laws and regulations.
***Update***
Following the publication of this story, Lawler Partners’ Bradley Tonks, the appointed liquidator in the AAA Financial Intelligence case, told ifa the claims for outstanding adviser commissions is now considered to be in the range of “around half a million dollars”.
Do you know more about this matter? aleks.vickovich@sterlingpublishing.com.au
Self License/Institutions………… Planners want to be paid fees and commissions from a licensee that; “failed to ensure its advisers were properly trained in relevant laws and regulations” How about you do the right thing by the clients and rebate it back to them.
These guys were soliciting me for nearly 2 years about coming on board – I was skeptical based on the “loose and attractive” offering.
There is no surprise here for me.
I’m currently with a smaller dealer group, that might be in the same boat and because of that, I’m moving into a larger home in the next few weeks.
Two things to add, the retail stockbroking model is dead and small cheap’ish dealer groups are just that.
To rip of the great man …. “price is what you pay, value is what you get”.
Good luck all.
self license anyone?
you betya, thats what they want.It amazes me how other peoples money can just vanish in these circumstances.
Wonder if Industry Funds will offer us 3/4 times multiple or 6/7 times ebit ?
News like this will ensure the stampede to institutional ownership is unstoppable.