An organisation of Melbourne-based financial advisers has defended itself against allegations made by a fund manager, explaining its opposition to a proposed fund listing and merger.
The Investor Action Group (IAG) – an association of Melbourne financial planning firms including boutique AFSL Segue Financial Services and other groups who spoke to ifa on condition of anonymity – has hit back at a statement issued by Rural Funds Management (RFM) accusing the group of scuppering a proposed merger.
IAG spokesperson deLancey Worthington, a portfolio manager at Segue Financial Services, told ifa the group’s opposition to the proposal to merge and list the Chicken Income Fund, RiverBank Fund and Australian Wine Fund is simply motivated by acting in his clients’ best interests, some of whom hold units in the relevant funds.
“We are the only ones standing up to this and saying it is wrong,” Mr Worthington said. “In the words of the late [Australian Democrats founder] Don Chipp, Segue and the Investor Action Group is ‘keeping the bastards honest’.”
The IAG has concerns over the impact of the proposal on its clients, including the possibility of a transaction cost being borne by unit-holders and perceived breaches of regulatory guidelines.
“This is being painted as a merger but really it is a takeover,” Mr Worthington said. “The proposal contravenes ASIC guidance” and fails to uphold the ‘arm’s length’ and protection of existing unit-holder principles, he said.
Mr Worthington also defended the IAG against a number of charges implied by RFM in statements to the media.
“Segue Financial Services do not take commissions and have never taken one cent of trail or commission from RFM,” Mr Worthington said, adding that there is “no vested interest whatsoever” in the IAG’s opposition to the deal or support of a motion to have RFM removed as responsible entity for the funds.
Quite simply, the IAG believes unit holders would benefit from “keeping each fund functioning in the unlisted environment” and from the “responsible entity for each fund [being] replaced by someone other than RFM”.
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