Investments 

‘Unregulated’ advisers under fire

‘Unregulated’ advisers under fire

The fallout from the collapse of an Australian property fund has continued to spread, with a group of mainly British investors taking their complaint against overseas advisers to an official body.

A spokesman for Thailand’s Securities and Exchange Commission confirmed it was handling a complaint originally made by 25 investors who claimed to have been caused great financial loss by the actions of unregulated and unlicensed investment advisers operating in the country.

The case illustrates the continuing fallout since Australia-based LM Investment Management went into administration in 2013.

The four-page LM Thailand Investor Group complaint, seen by Financial Adviser, alleged that 11 adviser firms had sold investors the LM Managed Performance Fund and other “loss-making unsuitable investments”.

The MPF had assets under management of approximately A$396.6m (£186.2m) in March 2013, when LM Investment Management, the privately-owned Australian specialist fund manager, went into administration.

Jarrod Villani, an executive director for KordaMentha, which was appointed as trustee of the MPF by the Supreme Court of Queensland on 12 April 2013 and has been working to recover funds for creditors, has warned the return to investors could be less than five cents in the dollar and potentially nothing.

Right to reply

Several of the advisers mentioned have defended their conduct and regulatory status.

Mark Kirkham, of Hong Kong-based Platinum Financial Services, which he said operated in Thailand under the name PFS International, said that clients who bought the LM fund had accepted its terms and conditions before transferring funds.

He added: “For any of those clients to now claim that they were not aware of the associated risks of investing into the LM product is nonsense, and clearly being done in an attempt to lay the blame of LM’s collapse at the feet of the advisory firms who assisted them with their purchases.”

Alan Lane, director of EMM Consultancy, said: “There is no SEC certification available for advisers who deal exclusively with expatriates, although the Thai authorities have been threatening to issue one for several years now.”

Another statement on behalf of advisers Neil Robbirt of Global Investments International, Philip Barbour of Coreharbour and Eric Jordan of Professional Portfolio International, noted: “The SEC does not currently provide an applicable license for international financial advisory companies and offshore fund regulation for legally registered Thai companies such as ourselves.”

Another adviser mentioned in the letter of complaint, Gary Bradford, now of QROPS Made Easy, said that LM funds had been distributed in markets regarded as well-regulated, including Hong Kong, saying: “It would be absolutely wrong to lay the blame for the LM catastrophe at the feet of so-called unregulated or unlicensed firms.”

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