On Thursday, the Australian Securities and Investments Commission (ASIC) announced it has cancelled the Australian Financial Services Licence (AFSL) of Wealth Trail after the Compensation Scheme of Last Resort (CSLR) made a payment for a complaint against the firm.
Wealth Trail, which entered voluntary liquidation on 30 April, failed to pay an Australian Financial Complaints Authority (AFCA) determination from April, resulting in the CSLR providing $150,000 in compensation to the client on 11 September.
As part of the implementation of the CSLR, ASIC is required to cancel the licence of any firm that fails to pay an AFCA determination and the CSLR subsequently pays compensation. The cancellation is also not subject to discretion or merits review.
The payment relates to the conduct of former Wealth Trail authorised representative Anthony Del Vecchio who was employed as an adviser at Freedom Finance Australia – at the time a corporate authorised representative of Wealth Trail – from November 2016 until October 2023, when his employment was terminated.
In March this year, he pleaded guilty to 24 charges of obtaining financial advantage by deception, resulting in the County Court of Victoria handing down a sentence of seven years and six months’ imprisonment with a non-parole period of four years.
Over the course of almost four years, from February 2020 to December 2023, Del Vecchio used his position as a financial adviser to convince family, friends and clients to transfer money to him under the pretext of investing their funds.
In some cases, he provided documents using the Freedom Finance letterhead to purport the terms of their investment in term deposits, bonds or shares, although no financial product was ever purchased.
The hit to victims spanned a wide range, from as little as $4,257 to a high of almost $1.2 million for a total of $4.48 million, which was deposited into his Commonwealth Bank of Australia accounts.
Del Vecchio stole the money to feed what Judge Gabriele Cannon called a “raging gambling addiction”.
Following his sentencing earlier this year, ASIC permanently banned Del Vecchio from providing financial services in September.
In July, ifa flagged that compensation relating to Del Vecchio and Wealth Trail was likely to hit the CSLR.
Near the end of January, Wealth Data analysis of the Financial Adviser Register showed that Endeavor Asset Management (EAM) had added 24 advisers to its ranks. A dramatic jump from the two it had prior to the influx.
In fact, the vast majority of EAM’s authorised representatives joined on the same day – 1 January 2025.
Wealth Data founder and director Colin Williams noted at the time that 23 of these advisers were still currently authorised at Wealth Trail, which he said “appears to have a common ownership link with EAM”.
Indeed, in October 2023, EAM announced that Chris MacEachern had come on board as a new equity investor.
MacEachern is the managing director at Melbourne-based Freedom Finance Australia – the firm that employed Del Vecchio – which has also moved its authorisation from Wealth Trail to EAM.
Coincidentally, this equity investment was announced just days after Freedom Finance became aware of Del Vecchio’s conduct.
Alongside his role at Freedom Finance, MacEachern is also listed as the chief executive of EAM.
Wealth Trail and Freedom Finance Australia had also sued Del Vecchio, with the Federal Court ruling in the firms’ favour in August, making a judgment for “damages and/or equitable compensation, to be assessed within 12 months of the date of these orders”.
“Neither the facts pleaded, nor the evidence tendered in support of the application, allow for the sum of damages or equitable compensation to be quantified,” Justice Button wrote in the judgment.
It makes me laugh that you lot of keyboard worriers make comments on cases you have no idea about, the FAAA would not get a headline out of this, so they go into hiding, if Mr Del Vecchio was a FAAA member they would have threw him under the bus and not supported him anyway. A licensee cannot check every interaction a client has, especially one’s where the adviser is acting illegally and are directing moneys for illegal means. Wake up to yourselves, the criminal is in jail, leave it at that and move on.
The gambling company should absolutely make the clients good. They’re keeping the proceeds of crime!!!!
Can you imagine if politicians were asked to foot the bill, for the corrupt acts of other politicians ?
What about the gambling agency that happily took proceeds of crime?? Na lets make the advisers pay for it
do other professions like doctors, lawyers architects for example have to foot their bill when someone in their profession with gambling issues (or other issues) causes loss?
I think not !
This is absurd!
I do not know why our industry stands for this.
Why are our industry associations not doing more??
Do Canberra’s Politicians & Bureaucrats pay compensation when they cause loss ?
Of course not
But somehow they think it is fine to Kill honest Advisers with this most insane CSLR.
Pollies & Bureaucrats Compo Scheme
What about is ASIC even did it’s job. Like 60 complaints over 10 years for Dodgy Dixons and ASIC did NOTHING.
How wonderful that this crook can rest easy in jail knowing his victims will be compensated by the rest of us honest, hardworking financial advisers.
Yet the gambling companies get to keep the proceeds of crime?
What a joke this industry has become!
Once again I will be increasing my fees well above CPI, pricing more Aussies out of independent advice.
Where is the PI insurer?
PI Insurance wouldn’t cover gambling debts and deceptive conduct and neither should they.
So, what is the actual point of ASIC issuing an ASFL system, for which they charge a fee to monitor? Seems like a system in which fees can legally be charged, but no responsibility taken?
not required
PI basically doesn’t cover anything that are likely to get you in trouble and are required to pay. if it did, then there wouldn’t be a need for CSLR which is literally the same thing but funded by industry. It’s the greatest business model on earth.