Debts trump AAAFI adviser claims

Following AAAFI’s collapse and licence cancellation in January, a number of former authorised representatives have claimed outstanding adviser commission and brokerage payments in the total order of $500,000.

However, according to an email from liquidator Lawler Partners to a former AAAFI adviser – obtained by ifa – the funds owing to advisers in outstanding commissions are a lesser priority for the liquidator than clawing back debt, some of which is allegedly owed by former advisers.

“We issued an initial demand to adviser debtors and subsequently referred those who did not respond adequately to a debt collection agency,” Lawler Partners intermediate James France wrote to a former AAAFI adviser.

“Once we are satisfied that all amounts have been pursued and recovered to the greatest benefit of all advisers, we will then proceed with a distribution,” the email continued.

“As a condition of the transfer from the AAAFI licence to their new licensee, advisers with outstanding debts are required to pay same amounts to us”.

The external debt collectors have had “some success” in clawing back debts ostensibly owed to the liquidator but “the most substantial debtors remain outstanding”, the email states.

A separate email from earlier this month said that debts owing must be “paid first”, before any advisers will see their commissions, and that an external debt collector will be chasing former advisers via their new licensees.

As reported by ifa yesterday, the liquidators are now seeking the jurisdiction of the NSW Supreme Court to intervene in the matter and help resolve the debt and commission claim disputes.

One former adviser, speaking to ifa on condition of anonymity, said he is not confident of a mutually agreeable resolution of the dispute, accusing the liquidator of stalling the case and “just using up what money was available before they start on the commissions”.

The adviser, who has a pending claim for outstanding commission payments, also called for the intervention of the corporate regulator, though he does not like his chances.

“One of the problems is that there is no support from ASIC in these dealings as ASIC believes all advisers are crooks to start with,” the claimant said.

“Most advisers are so used to being pushed around by our regulators that they don’t question anything – they just accept it.”