Sequoia Financial Group has sought to reassure its financial advisers while distancing itself from suggestions it may have had links with the collapse Shield Master Fund and First Guardian Master Fund.
In a message to advisers signed off by Sequoia’a Head of Licensee and Adviser Services, the company asserted that its licensee, Interprac, was not associated with the Shield and First Guardian products or the lead generation action activity around those products.
However, the message does acknowledge that “those advisers who recommended some of these funds did acquire client leads from such lead generation businesses”.
The message to advisers comes amid continuing investigatory activity on the part of the Australian Securities and Investments Commission (ASIC) and suggests that the advisers “may have become aware of some recent negative media, and we understand this may be raised within some of your client conversations”.
It then goes on in the following manner:
To assist you with such discussions we wish to confirm
The product failures and what appears to be serious misconduct by the fund managers and responsible entities of Shield master Fund and First Guardian Master Trust investment products have impacted many clients.
A range of accusations in some of the recent articles attributed to the liquidators of the funds of financial irregularities or fraud within historical management and reporting of the funds will take time to accurately value the remaining assets to determine the end financial impact.
The InterPrac licensee has been named in some of these press articles as 3 of our advice firms recommended the approved and impacted funds. Venture Egg being the business with the highest profile.
There is also some commentary around lead generators and the role they played in this situation and Venture Egg and those advisers who recommended some of these funds did acquire client leads from such lead generation businesses.
Under the heading of “What have we done to assist impacted clients” the message says “Interprac made the decision to terminate Venture Egg and bring the client book in-house so Sequoia Financial Advice could assist clients where required”.
“We follow the requirements of our IDR and EDR obligations of complaints management. We continue to support those clients who wish to deal with us. This is an ongoing issue and will likely take a long time to play out. Multiple parties such as Trustees, product issuers, Super providers, research providers, regulators in Australia and overseas and media outlets will all be advocating their positions and sharing their opinions for some time,” the message said.
Under the heading “Was Interprac associated in any way with these products or associated with the lead generator?” the message states: “No, the products were not related to our Licensee and were accessed through a range of investment and superannuation platforms. The lead generator business was not part of our licensee.
“The funds were approved by each trustee independently and held 3.75 ratings well after Interprac removed such products form our approved list.
On occasions where we do look to remove product from our approved list despite such products from time to time holding strong independent research ratings, we do this without prejudice,” the message said.