Sequoia Financial Group has revealed the scale of complaints lodged with the Australian Financial Complaints Authority (AFCA) relating to its role in the Shield Master Fund and First Guardian Master Fund collapses.
In its full-year results announcement on Thursday evening, Sequoia said there has so far been a total of $22 million in complaints against InterPrac Financial Planning over advice that its authorised representatives had provided.
“This represents InterPrac’s potential exposure prior to any assessment of the merits of each complaint, and before consideration of any recoveries or offsets,” Sequoia said.
While $22 million is a considerable figure for complaints against a single licensee, it is far from the full extent of the possible claims that InterPrac could face.
Ferras Merhi and his advice firm Venture Egg Financial Services were both authorised representatives of InterPrac until the end of May this year, when the licensee cut ties.
According to Merhi’s previous media comments, Venture Egg has about 5,000 clients with $250 million in Shield, and 3,600 clients with $192 million invested in First Guardian, putting the total exposure for clients to over $440 million.
However, Venture Egg isn’t the only InterPrac-authorised advice business that is on the regulator’s radar, with both Reilly Financial and Miller Wealth Group advising clients to invest in one or both of the funds.
According to Sequoia, the ultimate outcome will depend on a range of factors, including AFCA’s determination of each complaint, recoveries from the receivership of the funds as well as third parties, including auditors and superannuation trustees, the application of professional indemnity insurance from relevant parties, and existing legislation that protects members within the superannuation framework.
“AFCA has advised that the complaints remain at an early stage, that each complaint will be considered on its own facts and circumstances, and that no view has been formed on the merits of any complaint,” the firm said.
It also used the results release to announce a client support and assistance service that includes a “dedicated team of salaried advisers and support staff to work with clients previously serviced by Venture Egg and Rhys Reilly”.
“We recognise that the receivership of the Shield Master Fund and First Guardian Master Fund is causing significant distress for affected members. These developments are deeply concerning,” Sequoia said.
“We remain confident in the strength of Australia’s superannuation system, particularly the large platform market which is designed to protect members’ interests and deliver fair outcomes which offers both choice and member protections.”
The team will provide “appropriate guidance, information, and support” to members, the firm said, adding that it is also set to distribute a client information support package in the next fortnight.
“This package will outline the steps we are taking in collaboration with relevant authorities, superannuation funds, and government bodies to help identify and facilitate appropriate outcomes wherever possible. InterPrac remains fully committed to supporting every affected client to the best of its ability,” it said.
The news follows Sequoia establishing an AFSL governance committee, which includes former ASIC commissioner Danielle Press coming on board as independent chair.
“This new committee reflects Sequoia’s ongoing commitment to the highest standards of regulatory alignment, governance maturity and risk management,” the firm said in a statement last week.
“It introduces an elevated and independent governance layer above the operational compliance structures of each AFSL and will in conjunction with the executive report to the SEQ boards risk and compliance committee.”
Alongside these moves, Sequoia continues its efforts to extricate itself from the Shield and First Guardian scandal, with InterPrac planning to cease its authorisation of financial adviser Rhys Reilly and his firm Reilly Financial.
“All advisers have their own investment committees and InterPrac does not influence their choice of investments. InterPrac is in the process of terminating its relationship with Reilly Financial,” a spokesperson told ifa.
It is unclear at this stage whether InterPrac is also planning to stop its authorisation of Reilly’s other firm – The Life Insurance Company – which only kicked off in May this year.
Reilly is already showing as having dual authorisation on the Financial Advisers Register (FAR), joining Conexus Group as of 5 August, despite the licensee not authorising a financial adviser since January 2024.
Two other employees of Reilly Financial are also shown as authorised representatives of Conexus Group, however, neither are on the FAR.
The firm did not confirm whether this action would extend to Miller Wealth Group, however Miller has shut down its website and is listed as permanently closed. Both the firm and its advisers are current on the FAR and still authorised under InterPrac.
Fund failures haven’t dinged financial performance
Despite the turmoil facing Sequoia over the last year, the firm has enjoyed a solid second half as revenue hit $124 million for FY2024–25, $114.3 million of which was attributed to its licensee services division.
“The consolidated group EBITDA increased to $9.9 million with improved margin of just below 8 per cent,” it said.
“The board intends to declare a fully franked final dividend of 2.0 cents per share, bringing the total FY25 dividend to 4.0 cents per share all 100 per cent franked. A payout of approximately $5 million of annualised fully franked dividends reflects the group’s strong underlying business fundamentals.”
Sequoia also further addressed the trading halt from late last month, which came on the back of large volatility in its share price on the ASX, suffering a steep decline of around 30 per cent in a single day, dropping from $0.34 to $0.24 – its lowest price since 2020.
The exodus included The Australian Wealth Advisors Group (AWAG), which disclosed on 30 July that it has sold off the vast majority of its remaining holding.
On 15 July, AWAG disclosed it had reduced its ownership stake in Sequoia from 18 per cent to slightly above 15 per cent.
While AWAG did not wish to comment on its individual trading decisions at the time, a spokesperson for the firm told ifa that there are “challenges ahead” for Sequoia.
The latest move saw AWAG sell shares equating to around 12 per cent of Sequoia, dropping it below the 5 per cent benchmark to be considered a substantial holder.
AWAG had only bought into the firm in February.
Excellent outcome to members today by Macquarie announcing to pay 100% of investments in Shield Master. Now Interprac needs to step up and compensate losses and damages to members as they failed their oversight responsibilities!
“This package will outline the steps we are taking in collaboration with relevant authorities, superannuation funds, and government bodies to help identify and facilitate appropriate outcomes wherever possible. InterPrac remains fully committed to supporting every affected client to the best of its ability,” it said. – Interprac has failed to protect the investors due to poor governance and oversight. Interprac allowed investments by advisors under its license that no other big super fund allowed. Interprac had financial advisors that openly were criminal by changing investors risk ratings to invest in funds that no other big super fund allowed, due to the short period of existence. This was not a product issue, but lack of governance and oversight and unethical advisory services. What has suddenly changed to trust this organsiation, apart from fining it and making it compensate investors their losses, opportunity losses and facing the civil claims coming their way. Crole sounds like a frog in boiling water. ~12,000 investors that were ripped off at the expense of lack of governance and oversight so Interprac could make profits. The fact that Interprac now parted ways with these firms and AWAG reducing their share is telling investors Interprac will be facing the consequences of their poor governance and oversight.
The appointment of the former Commissioner of ASIC to Interprac is an actual conflict of interest. Government and ASIC should demand an immediate termination of this appointment. Has Interprac no understanding of Corporate Governance to have seen this appointment is unethical and against good corporate governance.
How has the share price not collapsed yet? With all the news now out and industry conversations of how bad this might get before it is all over, will SEQ shares be worth anything and to whom? AND advisers at Interprac are still being told that everything is fine and ASIC are happy which they are apparently believing.
All BS and the government is complicite in this. ASIC knew about it and did nothing, then the CEO gets a new gig earning a fortune. Jobs for the boys. In short the investers are not educated in knowing whefe their money goes, but Interprac are and to then reject claims is farcicle. This was not a dip in investmenr bit a cimplete steal of peoples hard earnt money. A drop of 10 percent you would be inclined to move your money, but to lose 100 percent is nothing short of criminal thats a lot of people recklessly took part in
May be part of money went oversea already No one find it
So the ASIC Commissioner that was the regulator when this all happened in 2023 has joined Interprac. She and ASIC was the watchdog, now she joined the company that failed to do their job to protect investors money! One cannot make this crap up! Is government and the current ASIC leadership so removed they don’t see the conflict of interest here? This requires a Royal Commission and significant number of criminal proceedings.
“All advisers have their own investment committees and InterPrac does not influence their choice of investments.”
Wow
How is the Licensee fulfilling its obligations to supervise its representatives if every representative can invest clients funds in whatever they feel like?
This should be Risk Management 101
There’s an apl linked to recommend or higher lonsec, all industry super funds and sqm. Some specifically misrated shield and first guardian
No actually. If the product isn’t on the wrap/platform APL the adviser needs to apply to the licencee and justify its inclusion. The licencee will then research the application, usually based on ‘Research House’ ratings, and approve or decline it. I’m guessing Shield and First Guardian products would have to been approved by the licencee, interprac. The various wraps/platforms have ‘000’s of investment options/products on them, but this doesn’t mean they are all available to be recommended by the adviser. They must be approved by the licencee first.
If Interprac survives this, ASIC should be shut down as it failed its duties as regulator. The appointment of a former ASIC commissioner to an extra layer of governance screams “trying to buy face with ASIC” and government! This is a significant conflict of interest and the government and ASIC should’ve raised a concern over such an appointment. Investors should loose trust completely in an organisation that does this. Significant concerns over integrity of Interprac and Danielle Press. That appointment should have raised significant questions with government.
So Interprac has $22m worth of complaints with AFCA. Interesting. I wonder how many complaints they have that are still at the Internal Dispute Resolution (IDR) stage? Let’s keep in mind that complaints need to go through the IDR stage before they can get to the External Dispute Resolution (AFCA) stage.
The fact that they have ended up at AFCA would suggest that Interprac has already rejected their complaints. I wonder how they can reject a complaint if a client has lost money in Shield or First Guardian, when the money was invested in Shield or First Guardian without the client’s consent, as has been widely reported.
It would be interesting to know the basis for Interprac rejecting these complaints. Maybe some of the impacted clients could explain this to us.
I’d guess that PI won’t payout if the licensee guidelines aren’t followed. And they aren’t going to pony up the cash to settle complaints.
Interprac will blame a few rogue advisers who did the wrong thing and this AFSL knew nothing and could not stop this criminal behavior even if they tried. The rogue advisers will blame the platforms who in turn will blame the research and they will blame the trustee. This rubbish will go on for months or even years. Eventually ASIC will have to give us something as they have all these resources invested in this process. Until ASIC step up and give the industry a meaningful answer to the simple question of how did this get so messed up, we are all playing the guessing game. Unfortunately, ASIC will respond well after those involved have retired or taken their money and run away with it. They will all just do the phoenix and start again.
I’d be happy to share my complaint and Interprac’s response with the media. In a nutshell, Interprac denied the advisor did anything wrong and they did not even address my grievance about not giving consent. I was one of the investors who had an SOA without Shield and FG, but ended up being invested in both from the outset. I didn’t even get an opportunity to experience negative consent – there was literally no consent. No knowledge. No communication. No nothing. I never even spoke to the advisor – it was all facilitated via the ‘super comparison’ service aka lead generator.
Yes..l’m in a very similar situation..l only got to speak to the very pushy Tim, from AGAT..for literally weeks he would ring, until l finally caved in..this too all began as a check my super enquiry..Never once got to speak to an adviser..they will “call you back”, but never did..they still wanted their fees though..l currently have zero information about where my super is, not even a statement, an account number or anything else for that matter..l have nothing of any type of official paperwork, to verify my account information..l have no idea, where, when, or what l can do, and what any outcome will be..All l know is that 41 years of superannuation savings are at risk..l’ve resigned myself to the fact that approx $480k is gone. It’s looking like there will be no enjoyable retirement for me that looms about 8 years away..shame that..l often think , well at least my phantom financial adviser, and fund managers will have a cushy outcome, with their palatial mansions, Ferarris, and Lamborghinis the 1000’s of us have funded..Well played, them.
Most investment occurred this way, a cookie cutter SOA, no advisor meeting, a mock up risk assessment and funds got invested. The first time investors noted where it was invested was in the Macquarie Wrap
App. When it all collapsed, then suddenly Venture Egg wanted an advisor meeting otherwise they apparently could provide further advice. Interprac as the governing body had no idea, even failed to ask questions how $1.4 billion moved in the funds over such a short period. Into funds that had a short lifespan and wouldn’t meet their minimum investment criteria rating. Yet the funds were over rated and no due diligence done where the funds invested the $. Yet Macquarie added it to their platform for investment purposes and reported fraudulent investment classes where the funds were never invested in.
I dont understand how they’re responsible given the cliebts signed and authority to proceeds application forms etc. Noone would have been signed without consent and if the invesmtent provider hadn’t stole all the money noone would be talking about it. This is a product, not advice issue
When advisers are being paid money to direct people into these funds it’s definitely an adviser problem
Advisers weren’t being paid. Commissions were banned along time ago.
There is only Ferras Merhi who owned both advice and lead gen businesses and benefitted from both. 1 person who owns multiple businesses.
There are lots of other advisers caught up in this that aren’t Ferras or related to Ferras.
It is super platform trustees and SQM Research that were definitely paid money by the funds though. Advisers weren’t.
It’s a fraud issue, neither an advice or product issue! Cookie cutter SOA, no adviser interactions, no consent, $ channeled through lead generators and money invested in funds that disclosed fraudulently that funds were invested in certain assets whilst they never did. On top of that no risk assessments for investors by financial advisors that didn’t have the required financial license under Interprac!
It’s a full blown lack of accountability by Interprac. They won’t survive this at all.
ASIC’s law enforcement against Venture Egg indicated: 1) Company, 2) Super and 3) ASIC legislation were all breached. This is a governing body compliance and oversight failure at an epic scale.
The documentary on Spotlight Channel 7 on 31/08/25 indicated advisors have amended investors risk ratings without their knowledge to high. No consent exists from investors where their funds were invested. This is an epic corporate failure and Interprac the oversight body will be held accountable. They’ll typically will try and blame others, but these investments were made under their licence. It is Interprac’s responsibility to do due diligence and governance reviews. If Crole is delusional, he’ll quickly will see how Interprac collapses under his CEO leadership.
Hello. I submitted complaints to Interprac and AFCA on the same day. I received email acknowledgement of my complaint from Interprac followed two days later by an email from Interprac saying “as you have now lodged a claim with AFCA we are closing your complaint”. In other words they did no investigation at all and seemed happy to palm it off to AFCA. My AFCA complaint is now being taken over by a well known law firm on a no win no fee basis. The lawyers will pursue compensation from AFCA but if they think they can get more by going after individuals and businesses they will.
You don’t need a lawyer for an AFCA claim. That is why they have AFCA claims managers. The Lawyers are taking you for a ride.
False! With a lawyer you don’t need to deal directly with AFCA and they have done this several times before successfully.
InterPrac rejected my claim stating the advice was appropriate, yet my adviser was getting marketing fees, never spoke to me and they recently ended their relationship with him. Make it make sense.
InterPrac didn’t even gets the facts right in their response to my complaint.
They said my super was on the Macquarie wrap platform – when it was on NQ Super, as stated in my complaint.
They defended Venture Egg and said they apparently did nothing wrong, then in another paragraph mention Riley Financial when I had absolutely nothing to do with Riley.
They also got dates wrong – they said I was switched over to shield and first guardian because apparently they weren’t available prior to September 2023….. when my statements show I was invested in shield and first guardian in August 2023. I wasn’t switched over to them either, my super was poured into them from the get go.
Sounds like old mate at Interprac can’t keep up with the flood of complaints so is attempting to copy and paste but failing miserably.
Interprac had absolutely no idea where my funds were invested. Until they were referred to ASIC lawyers that already went through all my details for a year to use against Venture Egg and frozen their assets. Interprac has no idea!!! They don’t even maintain a proper complaint register with complaint reference numbers! AFCA and lawyers are going to have a field day dragging them to the gutters. One of their financial advisors reviewed my investments and made a comment, he doesn’t understand how Interprac allowed Venture Egg to invest my super in the funds they did, as it doesn’t meet the minimum requirement and doesn’t fit my risk profile.
Interprac has failed to respond to the complaints and also failed to respond within the 30 day timeframe provided by AFCA. Then it moves to a case worker at AFCA, but currently it takes 14+ weeks before a case worker gets assigned. Give it time, the claims will reach $1billion and the civil claims will be more. AWAG knows the writing is on the wall for Interprac.