A NSW Central Coast-based financial adviser burnt by the collapse of the Willmott Forestry scheme has called for mandated independence of responsible entities of managed investment schemes.
In a submission to the Senate inquiry into the performance of ASIC, Mark Hoddinott of Hoddninott Consulting, a financial adviser licensed by Premium Wealth Management and former president of CPA Australia, argued gaps in the regulatory system led to nefarious activity in the aftermath of the collapse of Willmott.
“In my role as a financial planner from the period 2003 to 2010 I recommended to various clients of my practice to invest into the timber industry in Australia via Willmott Forests’ managed investment schemes,” the submission stated. “These were sound financial investments, approved by the ATO for tax incentives and supported by independent research.”
Mr Hoddinott argues that following the scheme’s failure and entry into liquidation in 2010, there was a “blatant transfer of wealth from mums and dads to predatory corporate raiders and complicit liquidators who acted in total conflict of their duty of care”.
However, the adviser – who explains he was also a shareholder in Wilmott – does not blame these aforementioned stakeholders but the regulatory system overseeing managed investment schemes – and ASIC in particular.
Mr Hoddinott said the fact there is no requirement for responsible entities of managed investment schemes to be independent of scheme managers and promoters is a “core flaw” in Australian corporations law.
ASIC should respond to concerns from investors, ensure matters like Willmott are “monitored to ensure investor rights are protected” and ensure “flaws in the legislation are remediated” the submission stated.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 17 Oct 2018Private banking has no place for bad advisersBy Eliot Hastie
- 17 Oct 2018CBA admits failure to tackle conflicted adviceBy James Mitchell
- 16 Oct 2018NAB to address advice issues in $314m payoutBy Eliot Hastie
- 16 Oct 2018Former BT exec joins mortgage and financial advice groupBy Reporter
- 16 Oct 2018ANZ under fire over ‘conflicted’ IOOF dealBy James Mitchell
- 16 Oct 2018Advisers should be early call in divorce casesBy Adrian Flores
- view all