Connect and engage

$3m off adviser bill - stop normalising this as an adviser expense.  It is the government holding small business to ransom.  It is not acceptable by any means and I hope that all who are involved in doing this to financial advisers end up retiring with not a cent to their names.

And now its with the administrators.  Administrators are not on the investors side their business model is how long and how many fees we can extract from victims.  Nothing will happen to the directors that caused this and asic will say stuff but they have no real power or balls to do anything.

I know others that went through a similar thing with Hailfax. asic let them submit audit reports for 10 years that did not match up.  When the director of halifax finally went into self administration it went to administrators who extracted 4x the fees that the original directors embezzled.  The administrators too 4 years to come to the conclusion they could not track transactions and work things out.  During that time the victims were paying for the administrators empty offices during covid.  Asic did nothing to help, the courts could not tell the difference between a stock holding, cash, exchange rates and dividends.  Then the best the administrators/couts could come up with after 4 years was to pool everyones funds and pay out based on balances at the start of the 4 year administration.  People in SMSF invested in the mag 7 lost all their gains.  All you have seen is the auditors get a 50k fine and investors lost 50mill to administrators and dogy directors.  Asic and the courts signed off on it.  The whole system is broken and corrupt.

Don't trust the finance orgs, banks, asic, courts or administrators.

Importantly, she noted, the investigations are looking at the entire chain, including conduct of the lead generators, the financial advisers, the superannuation platforms, “who we think have a real role here”, and the research houses that “listed these funds as investable”

Wonder if ASIC are going to question their own role in this.

Out of interest, what is ASICs role in policing these investments.

It could well be argued that given ASIC didn't have any issues with them, they were deemed to be appropriate for investors.

Did it not raise a red flag with ASIC that that there was a significant scale-up of investment over a short period of time? – largely driven by the lead generators and handful of advice firms funnelling client funds into the products.

If this "should have raised a red flag with platforms" why didn't it raise a red flag with ASIC? Who will lead the class action against ASIC for lack of oversight?

I think the only way to find that out is to take them to court. If I had to take a guess.. I'd say there certainly were people inside Interprac that knew the "business model" and ok'd it. That said they probably did NOT know of the under the table payments the Advice businesses were receiving (which is also illegal).

It's also likely they did NOT know the investment funds themselves (Shield/First Guardian) were dodgy.  

Unfortunately it's a multi levelled issue and ASIC were asleep at the wheel, I've heard anecdotally multiple Advisers informing ASIC of this scam and the delay of action allowed it to continue for so long and hence the severity of the issue as well. 

Now, me as an adviser who is trying to do the right thing is likely going to have to fork out money as part of the CSLR to pay back the victims of these crimes. I doubt Venture Egg/Interprac and the likes are going to be able to afford the thousands of claims against them.

If you haven't already, keep up to date with some of the other people on reddit, r/ShieldMasterFund

What actually were the underlying investments? 

I feel I’m lucky now I’m 42 me and my wife lost $80000 each which is still a kick in the teeth 

LOL

lol

FA here... that's the sickest part of it all. Platforms like netwealth and macquarie green lit products that you can't even look at their historical performance or asset holdings. 

So wrong as now advisers are seen as the scam artists. 

Even better, Lighthouse were granted an AFSL by ASIC back in 2022. 

$480M invested into Shield Master Trust, $440M into First Guardian Master Fund $440M and $160M into Australian Fiduciaries Limited.  Yes $80k is a reasonable amount of money but in it seems to me that ASIC probably should have been concentrating in a different area. 

14 clients and $81,652 equates to an average of $5,832 so they didn't miss on the annual fee, most of my clients wouldn't be happy paying that fee without any "service" being provided so I am curious if this is an ASIC interpretation of no service or actual no service.  The business was also a good size so 14 clients indicates the vast majority of the clients got "serviced".

She had Cancer and daughter was recently killed in a car crash and she took time off work from Feb 2022 and returned March 23 and upon returning to work she failed to refund the fees.  

ASIC needs to demonstrate something for the ASIC Levy they collect. Interprac as the AFSL does no supervision of their advisers. Interprac had research on these funds from SQM who are or were operating under their AFSL. Interprac have other advisers running the same call centre business models but not using these failed funds but what are they using and how competent let alone complying is their advice. Interprac are still telling current advisers that nothing is wrong and everything is fine with no further issues expected. Clearly ASIC are under resourced because this makes no sense. By the time something is done, the people involved will be retired and laughing all the way to the bank. While the platforms played their part in allowing these funds to be listed, they were given research to support the product, approval by Interprac that they can be used and confirmation that the FUM will follow, which it did in record numbers with nobody questioning how such crazy numbers were possible from the advisers involved.

Yep should be doing the work to get paid, FFNS is not cool. 
But at the same time we have the ALP, Industry Super Funds and ASIC trying to green light the biggest FFNS Hidden Commissions ever seen. And somehow that will be fine, there certainly won't be any ISF call center backpackers getting banned for 10 years. 

The average employment term of those Advisers were between 3 month to 9 months. The sales manager, the Compliance Manager, the Directors employment terms are measured in years. 
 
ASIC blaming Advisers is trying to avoid  their own failings and accountability. 

Good to see the compliance manager was on top of things there. Banning for 10 years seems a big high but we don't know what occured without knowing more i suppose. Get what is coming. Get rid of these idiots I say.

I like the following sentence.  In other words they aren't financial advisers.  ASIC sat on their behinds and did nothing in relation to this group and others for way too long.  

“They’re not financial advisers, per se, but they are effectively operating like call centres with a script and with the job of enticing these investors into the web.”

There are some big name platforms that let this crap through, they shouldn't get off scot free. 
There are still comparison ads popping up on Facebook so hopefully asic are all over those too. 

www.asic.gov.au/regulatory-resources/man...-investment-schemes/

ASIC’s role in relation to regulating managed investment schemes includes:

- undertaking proactive and reactive supervision and surveillance activities into operators’ conduct and disclosure obligations
- taking enforcement action in response to non-compliance with the laws administered by ASIC
- assessing Australian financial service (AFS) licence applications submitted by entities seeking to be operators of registered and unregistered managed investment schemes
- assessing applications for registration of managed investment schemes
- exercising ASIC’s administrative powers in relation to AFS licences and disclosure
- providing guidance to industry and policy advice to the Australian Government
- providing relief from provisions of the Corporations Act where necessary and appropriate.


From the first dot point, what 'proactive' measures were undertaken?? Looks like they took a more reactive approach after the fact. The laws were broken well before the eventual failure of these funds. If biggest regulatory body could not have guard rails in places to prevent this from happening, it indicates that the system is broken.