Sequoia Financial Group, the ASX-listed owner of InterPrac Financial Planning, expects it will have to pay out a professional indemnity insurance excess due to claims arising from the collapse of the Shield and First Guardian master funds.
In an update to the ASX on Tuesday, the group said further details will be revealed in its half-year results in February.
The firm has also reached a final settlement with the receiver of Libertas for $980,000, due to an issue it said arose prior to the purchase of the licensee it later shut down.
Libertas was the first AFSL to be cancelled by ASIC for failing to pay an outstanding AFCA determination that has gone to the Compensation Scheme of Last Resort, drawing criticism from the Financial Advice Association Australia, which accused the company of shifting $1 million before the company went into voluntary administration.
“In order to mitigate any potentially similar legacy exposures, the group has implemented enhanced risk management, compliance monitoring, and adviser supervision frameworks across its licensee and adviser services division,” the group said in the ASX announcement on Tuesday.
Sequoia hired former ASIC Commissioner Danielle Press to lead a dedicated governance committee and InterPrac is being sued by ASIC for oversight failures of its licensed advisers that were allegedly involved in moving clients into Shield or First Guardian.
Sequoia group chief executive Garry Crole previously told investors he expects the company will receive fines and compliance restraints.
InterPrac licensed Ferras Merhi and Rhys Reilly are both under investigation by the regulator; Merhi was also responsible for a separate licensee, Financial Services Group Australia.
Merhi has had his assets frozen since the start of the year, although ASIC has accused him of hiding further assets.
On 17 November 2025, Merhi’s travel restraint was extended until 31 March 2026 and asset freezing orders were extended until the conclusion of ASIC’s proceedings Merhi.
Merhi is considered the central figure in the advice component of the collapse, and is allegedly responsible for signing over 6000 Statements of Advice within a three-year period.
He is also accused of taking money from the funds to help market them and received inflated loans to help purchase his businesses.
All up, around 11,000 investors have lost over $1 billion after ASIC acted against the funds due to governance concerns of the schemes and misuse of investor money.
Liquidators for First Guardian have so far only been able to claim $1.6 million from the $480 million fund.
