Collapsed advice firm boss speaks out

Yesterday, the corporate regulator announced it has cancelled the Australian Financial Services Licence of Capital Advisers Pty Ltd – formerly trading as Freeman Fox Pty Ltd – for “not having adequate compensation and insurance arrangements and failing to have measures in place to ensure their organisational competence” and entering into voluntary administration.

Former institutional fund manager David Adiseshan purchased the Freeman Fox business in October 2013 through his family office company Instividual Investments, with a “view to recapitalising the AFSL”, he told ifa.

Freeman Fox had formerly been one of two licences controlled by Peter Spann, described by ABC TV in a 7.30 report from April 2013 as a “wealth creator” facing “allegations of criminal behaviour” over his involvement with managed fund Excela.

Despite the association with Mr Spann creating a “bad smell” for the Freeman Fox brand, Mr Adiseshan said he thought “the AFSL could be saved”, rebranding the company as Capital Advisers.

“I was interested in the managed fund platform revenues and risk revenues,” Mr Adiseshan said. “I thought the AFSL was clean and in good order.”

However, after completing the purchase of Freeman Fox on 18 October 2013, Mr Adiseshan said he developed a “number of serious concerns” regarding the inappropriate structure of responsible managers and issues relating to professional indemnity insurance.

According to Mr Adiseshan, he then notified ASIC of his concerns and resigned his directorship of the business on 31 October 2013, before acting on “legal advice” to move the firm into voluntary administration, seeing that the “AFSL could not be salvaged”.

Freeman Fox’s financial advisers and authorised representatives had already left the company and assets have been passed on to the liquidator, he said.

Instividual Investments also owns FNQ Wealth Creation Pty Ltd, a Cairns-based financial advice firm trading as Meridien Wealth, which is licensed by non-institutional dealer group Premium Wealth Management.

Premium Wealth Management managing director Paul Harding-Davis told ifa the licensee has "no connection to Capital Advisers".

"Meridien Wealth is one of our practices and has a very good compliance rating,”  he said.