HUB24 is in the process of bringing the trustee of its super fund in-house, cutting ties with troubled EQT Holdings.
The firm told the ASX on Tuesday that it intends to transition the trustee role of HTFS Nominees, currently owned by EQT Holdings which also owns the challenged Equity Trustees that has embroiled in the collapse of the Shield and First Guardian master funds.
When HTFS Nominees was appointed as trustee for HUB24’s super fund, an agreement was made which would allow HUB24 to acquire the trustee entity.
A spokesperson for HUB24 confirmed to Professional Planner the option to acquire HTFS Nominees has always been a strategic option but declined to comment on anything related to EQT Holdings.
The spokesperson said due diligence to acquire HTFS Nominees is underway, which will be subject to regulatory approvals.
Despite ASIC’s legal proceedings, chair Joe Longo had told an industry event last year he didn’t see any reason that the trustee-for-hire model would end.
ASIC is suing Equity Trustees for due diligence failures over its gatekeeping role in the blow-up of Shield and First Guardian, and APRA has since added additional licensee conditions to the company.
A spokesperson for EQT told Professional Planner after the conditions were announced that the firm is “committed to active engagement and co-operation with the regulators” and that it had “already been undertaking an uplift in investment governance, and has established plans to do more, which it considers aligns with APRA’s new requirements”.
EQT Holdings managing director Mick O’Brien said the company has also been victims of fraud, arguing the trustee was misled by the directors of the funds and that the trustee had no relationship with the advisers, licensees, lead generators, responsible entities, fund managers or property developers involved in the scheme.
While Netwealth and Macquarie had negotiated with ASIC to remediate investors on its platforms, Equity Trustees planned to plead to the government for financial assistance to remediate clients, under Part 23 of the Superannuation Industry (Supervision) Act.
HUB24 chief executive Andrew Alcock told Professional Planner last year that Shield and First Guardian failed to get past the platform’s due diligence process.
“They couldn’t answer our questions to get on the platform so we wouldn’t spend more time looking at it and had no advice to recommend it,” Alcock said.
Equity Trustees was the trustee for NQ Super and DASH’s Super Simplifier platforms which hosted Shield, as well as NQ Super/Freedom of Choice which held First Guardian.
ASIC has centred its investigation on the advisers, lead generators and managers of the funds, as well as taking action against “gatekeepers” in the financial advice process.
The directors of the Shield and First Guardian funds have been accused by ASIC of misappropriating investor money for high-risk investments, pet projects and personal expenses.
Financial adviser Ferras Merhi is one of the advisers ASIC believes was a central figure to the distribution of the Shield and First Guardian funds, 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 receiving inflated loans to help purchase his businesses.
The Australian Financial Complaints Authority has published lead decisions finding that clients of the Shield and First Guardian funds were victims of poor advice.
