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Global IFAs voice ASIC concerns

A body representing international independent financial adviser communities has criticised the Australian Securities and Investments Commission's (ASIC’s) involvement in the collapse of LM Investment Management (LMIM).

In a formal submission to the Senate inquiry into the corporate regulator, the Advisers’ Committee for Investors (ACI) – a Hong Kong-based organisation “formed by a number of independent financial advisers (IFAs) based in the Far East, Asia, Middle East and Europe” – explained its members had been affected by the failure of Australian fund manager LMIM.

“Since LMIM went into voluntary administration on 19 March, the ACI has become increasingly concerned over the sequence of events that has failed to protect the investors both on a domestic and international basis and calls into question the structure, organisation and fairness of Australia’s regulatory system,” the submission stated.

“The handling of LMIM’s collapse by those that were granted access and responsibility has not been satisfactory. Investors have been left confused and distressed,” it continued.

The ACI welcomes a Senate inquiry into ASIC and questions the corporate regulator’s effectiveness in protecting consumers, the submission stated.

In August, the Queensland Supreme Court ruled that FTI Consulting liquidators appointed to the wind-up process for one of the LMIM funds stand down, after a conflict of interest was established by the court.

In a statement released on Friday 9 August, an ASIC spokesperson said “the future for investors in LM First Mortgage Income Fund (FMIF) is more certain after a court yesterday appointed a receiver to it”.

In March, it emerged that the $3.1 billion LMIM was facing administration.

An LMIM spokesperson told ifa the authorised representatives operating under its Australian financial services licence (AFSL) would not be affected by the entering into administration, as they do not “write any business for [its] funds”.