InterPrac Financial Planning will no longer be cross guaranteed by other Seqouia-owned entities, with the company declining to confirm whether the change was being made to avoid mounting liabilities from the Shield and First Guardian collapse.
The ASX-listed owner of InterPrac Financial Planning, Sequoia Financial Group, said in its half-yearly report that on 12 September 2025 a revocation of deed was executed to release InterPrac, Sequoia Asset Management and Sequoia Wealth Management from a deed of cross guarantee.
“Upon the revocation taking effect, the released entities will cease to be parties to the deed of cross guarantee and will no longer be covered by the cross-guarantee arrangements with the other group entities,” the company said.
Sequoia declined to confirm whether the end of the cross guarantee was part of a plan to close down the InterPrac licensee to avoid paying out any liabilities in the aftermath of the Shield and First Guardian collapse.
“Sequoia advises that its disclosure is complete and has nothing further to add,” a Sequoia spokesperson said.
The group said in its half-yearly results that a strategy is in place to “progressively rebalance” earnings away from reliance on InterPrac towards higher-margin segments in the licensee and adviser division including the expansion of the group’s salaried advice and corporate finance business into the Asia Pacific.
But the company has initiated a review of the InterPrac business model to “strengthen governance, enhance compliance frameworks and develop a higher-return model” which will be completed by June 2026.
Sequoia denied last year that it was transferring advisers out of its licensee with the intention of avoiding mounting liabilities from the collapse of the Shield and First Guardian master funds. The firm had previously placed the Libertas licensee into voluntary administration which saw an AFCA claim go to the Compensation Scheme of Last Resort.
Former ASIC Commissioner Danielle Press was appointed last year to lead a dedicated governance committee for Sequoia Financial Group, due to the fallout of the Shield and First Guardian collapse.
Earlier this month, AFCA published its lead determination against InterPrac and the external dispute service found the licensee failed to follow the product disclosure statement (PDS) for the Shield Master Fund which warned against a sole allocation to its high growth option.
Sequoia said it was receiving “high-level” legal advice in response to AFCA claims. “InterPrac intends all avenues including engagement with Kings Counsel on these matters,” the firm said.
ASIC Commissioner Alan Kirkland told the Professional Planner Advice Policy Summit this week that the regulator will rely on the courts to decide whether InterPrac should have an AFSL as it seeks to restrain the licensee from carrying on any financial services business.
In addition to being sued by the regulator, Macquarie, Netwealth, CFS, AMP, BT and HUB24 have all restricted access to InterPrac’s authorised representatives on their platforms.
Padua Wealth Data reported last week that Sequoia has seen 55 advisers depart since the start of last October.
Shield and First Guardian grew due to a sophisticated network of lead generators that contacted people who used online “superannuation health check” advertisements and used high pressure sales tactics to refer them to financial advisers.
ASIC acted against the Shield and First Guardian funds over concerns investor money was being misused on high-risk investments, pet projects of the directors and personal expenses.
The regulator has taken former InterPrac financial adviser Ferras Merhi to court over allegations he received money from the funds to help market them and received inflated loans from the fund to help purchase his businesses.
ASIC has alleged Merhi was responsible for signing more than 6000 Statements of Advice within a three-year period.
