HUB24 banned “certain” InterPrac Financial Planning advisers from its platform last year and ceased onboarding new practices authorised by the licensee.
Professional Planner revealed yesterday that BT and AMP have joined the list of platforms that are banning new business from InterPrac Financial Planning advisers in the aftermath of the $1 billion Shield and First Guardian collapse.
The letter distributed to InterPrac advisers informing them that the AMP and BT relationships had ceased said they could continue to work with HUB24 and the MLC Expand platform.
A spokesperson for HUB24 said they are clarifying their position “in light of recent reports” but would otherwise not comment on individual circumstances.
“We have followed formal processes, launching an investigation and thorough review of InterPrac’s advice and compliance standards some time ago,” a spokesperson said.
“Working with InterPrac, we conducted a comprehensive risk review of advisers using HUB24. Late last year, we stopped accepting new clients from certain InterPrac advisers and ceased onboarding of new practices licensed under InterPrac that were not previously on the HUB24 platform. We continue to monitor developments and make informed decisions, noting the importance of access and continuity for InterPrac clients.”
The platform provider declined to comment beyond the statement. InterPrac declined to comment but Professional Planner understands the licensee is unaware of any changes.
HUB24 chief executive Andrew Alcock told Professional Planner last year that the platform declined to host Shield and First Guardian after the funds failed to pass due diligence.
BT will cease permitting the distribution of new products and services to InterPrac advisers on the Panorama platform effective 13 February, while AMP’s North ban will kick in from 27 February.
CFS, Macquarie and Netwealth had already ceased taking new business from InterPrac.
Macquarie and Netwealth agreed to remediate customers to the original starting position before being rolled into the funds, avoiding protracted court proceedings that would delay any compensation to members.
Insignia Financial, the owner of MLC Expand, declined to comment, but Professional Planner understands the group has no intention of ceasing any relationship with InterPrac and trusts the governance systems it has in place to monitor advisers.
Danielle Press, chair of MLC Super and a former ASIC Commissioner, was enlisted last year to lead a dedicated governance committee for Sequoia Financial Group, the ASX-listed owner of InterPrac.
InterPrac is being sued by ASIC and was responsible for authorising Ferras Merhi who the regulator alleges signed over 6000 Statements of Advice in a three-year period while under the authorisation of the licensee.
Padua Wealth Data reported last week that Sequoia has seen 55 advisers depart since the start of last October.
Of the 55 that resigned, 40 were reappointed, with 14 moving to Centrepoint Group, four to Lifespan, three to Advice Evolution and 14 to different smaller licensees.
ASIC has alleged in court that Shield and First Guardian paid Merhi or entities associated with him for marketing, including the lead generation services that funnelled clients into those investment products.
The regulator has also alleged in court that InterPrac were aware there were instances where the lead generators discussed the products with potential clients.
AFCA determinations show that lead generators were receiving part of the advice fees and in some cases, an investment manager for Shield was the lead generator.
APRA reviewed platform trustees last year in the wake of the Shield and First Guardian collapse telling the industry that governance standards needed to be lifted, however the focus on the review was on product selection rather than adviser access.
The prudential regulator has since introduced new licence conditions on Equity Trustees, Diversa Trustees and Netwealth that focused on lifting onboarding due diligence of products and conducting independent reviews of high-risk investment options they are offering.
The Albanese government has also prioritised policy responses to the collapse, including launching a new consultation into managed investment schemes this week and a consultation into professional indemnity insurance arrangements late last year.
There are also more policy proposals in the pipeline centred around heightened restrictions around lead generators, a cooling off period for super switching and limiting “inappropriate” advice fee deductions.
