The owner of InterPrac Financial Planning expects it will receive fines and compliance restraints due to ASIC’s legal proceedings against the licensee but has criticised “false press” and competitors for a smear campaign.
At the AGM of ASX-listed Sequoia Financial Group, the owner of the troubled InterPrac licensee, group chief executive Garry Crole conceded they do have some blame and expects there will be a fine and some restraints put on the licensee through an enforceable undertaking.
“That is expected but what we do not expect is that InterPrac will look to lose [or] run away from its obligations,” Crole told investors on Thursday morning.
ASIC announced last week it was suing InterPrac for failing to monitor a pair of advisers who the regulator considers largely responsible for moving clients into the Shield and First Guardian master funds.
Crole said the disruption had caused “a lot of grief” for the business.
“The share price is very hurt, the brand is damaged, and we expect to see adviser losses,” Crole said.
“In my conversations with the advisers they don’t want to go anywhere. They love us, they believe that our compliance regime is very, very strong.”
Instead, Crole criticised discourse in the media and from competitors as creating instability in the business.
“The fear campaigns that are coming at our client base, our advisers is very loud,” Crole said.
“It’s very challenging for them to just say, ‘We’re going to stay’. Most of them will, but there’s no doubt we will see some adviser losses in our licensee for hire business over the next 12 to 18 months as this plays out.
“Some of the advisers are fearful and they read a lot of the false press and a lot of the false allegations that are coming from our competitors to create that press and they will leave.”
The $1.2 billion collapse of Shield and First Guardian has left the retirement savings of approximately 11,000 people up in the air and ASIC has alleged two InterPrac authorised representatives were responsible for the majority of the clients that had been moved into the products.
One of those advisers, Ferras Merhi, is alleged to have received payments from the funds to help market the products as well as receiving inflated loans to buy his businesses.
ASIC has also taken action against other parts of the advice chain; it’s suing SQM Research and Equity Trustees, but Macquarie has agreed to remediate Shield investors.
Netwealth has asked for the government to assist with client remediation and it’s expected Equity Trustees and Diversa Trustees, who also held one or both products, will do so as well.
Crole acknowledged a report from The Australian last week that Netwealth and Macquarie would restrict any new business to the platform.
Crole confirmed this wouldn’t restrict any existing business, which includes $1.3 billion in funds under management (FUM) at Netwealth and $1 billion in FUM with Macquarie.
“Ongoing service fees and support will continue,” Crole said.
Crole said he had “suspicions” about the why the decision was made but didn’t want to air any assumptions publicly.
“We’ve looked to engage with both Macquarie and Netwealth for the basis for those decisions, as yet we don’t have an answer for the basis of those decisions,” Crole said.
“We continue to talk to them about those things. We have a 20-year relationship with both organisations. I respect both organisations highly.
“We would like to continue to deal with them. We’re looking to try and talk to them about it. Hopefully over time that relationship can re-commence.”
The company has reduced shares from 135 million in 2023 to 123 million as of 30 June 2025, but had since done further buybacks when the share price dropped after ASIC announced the lawsuit.
Crole said he has the backing of the top 20 shareholders which control 55 per cent of the company.
“The noise is disappointing but the support that I’ve got from the major shareholders is very loud and I thank them for that,” Crole said.
Crole said they are likely to merge Sequoia Family Office business with Sequoia Financial Advice and part of the family office business with Sequoia Corporate Finance.
