A lawyer representing former clients of a financial planning firm under administration has questioned whether the move is a device to shield against Financial Ombudsman Service claims.
According to a letter sent from Perth-based lawyer David Huggins to the Australian Securities and Investments Commission – obtained by ifa –self-licensed firm Chambers Investment Planners went into administration “because it was unable to meet its ongoing liabilities with respect to FOS claims that have been made against it”.
In July it emerged that Grant Thornton administrators had been appointed to the firm, with a source close to the matter subsequently telling ifa Chambers was under pressure from a dispute with its PI insurer.
However, Mr Huggins – who represents a number of former clients of Chambers seeking damages for losses – has a number of concerns about the administration process.
The letter to ASIC asks the regulator to investigate “whether the placing of Chambers into administration is just a device that it is intended to allow Chambers to avoid its FOS related liabilities”.
In addition, the lawyer calls on ASIC to investigate whether Chambers still has an active AFSL and whether it has “adequate compensation arrangements in place” in accordance with obligations under the Corporations Act.
“Chambers currently holds an AFSL and I suspect (but do not know this) that it is operating – as I understand the position – a company that is in administration cannot continue to hold an AFSL – the point being it is unclear to me why Chambers’ AFSL has not been cancelled,” Mr Huggins wrote.
“From what I’ve seen, the standard of advice provided by Chambers was very poor – in my view, the persons who provided that advice should not be allowed to continue working in the financial services industry.”
Do you know more about this? [email protected]
The ifa Excellence Awards are back in 2021 and nominations are now open! This prestigious accolade recognises exceptional professionals within the financial advice industry, shining a light on the outstanding achievements from the nation's best and brightest. If this sounds like you or someone you know, then nominate today for the ifa Excellence Awards 2021!
The Federal Court has issued BT and Asgard penalties of $1.5 million each for charging fees for no service and making misleading statements. ...
The wealth giant has announced a raft of further changes to its advice model, including the conclusion of client register buy-back arrangements for i...
The latest ASIC estimated industry funding levy proves that the current formula is “not equitable or sustainable” according to FPA. ...