The Australian Securities and Investments Commission (ASIC) yesterday accepted an EU from the group’s former chief executive and current managing director, Darren Pawski, which will see him step aside from any active involvement with the group, although he remains a major shareholder. He will also permanently be excluded from any role in the provision of financial services.
ASIC expressed concerns over compliance processes at the group extending back to its surveillance of WealthSure, which commenced in 2010.
The group’s chief executive and new managing director, David Newman, told ifa WealthSure has already terminated more than 100 representatives as it looks to focus on its remaining 230-strong “core of loyal and quality advisers”.
He said that over the past six months new staff have been hired, compliance consultants have been engaged, a review of representatives has begun, compliance staff have been provided with external training, an ‘Adviser Academy’ has been put into place and an audit and risk management committee has been established.
He also rebuffed recent media speculation that the group was in danger of entering administration and said that if ASIC had concerns over WealthSure’s financial viability, it would not be pressing on with the EU.
Mr Newman was referring to a recent Federal Court judgement that suggested the group could become insolvent if a stay were not granted on the payment of a client claim. However, he added the stay had been granted and the group’s professional indemnity insurer, QBE, had now paid the claim, although it remains subject to appeal.
Great to see WealthSure taking what are undoubtedly the tough steps to turn things around. Good on them.
What a story… a terrible licensee with poor to no adviser resources and a non existent compliance regime with a PDM hiring policy not fit for a parking attendant. It’s not surprising to see such a poorly run and mismanaged dealer group on it’s knees over it’s past failings as a responsible licensee… which is complimented by it’s abundance of salesman and fly-by-nighters masquerading as financial advisers… Well done Wealthsure. In the words of George Bush Jr ‘Mission accomplished.’