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.”
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