The Financial Planning Association (FPA) said the key findings are a blunt prompt to financial regulators and product manufacturers to demonstrably lift protection and disclosure standards in the interest of protecting Australians from further fraudulent actions and criminal attack on their life savings.

“Today’s findings from the Parliamentary Joint Committee (PJC) review of the collapse of Trio Capital remind us that the client-first principle must apply as an iron-clad undertaking by all industry participants and those who oversee the sector,” said FPA CEO Mark Rantall.

The PJC acknowledged that the collapse of Trio did not result from a failure of advice. Rather, it was a pre-meditated and sophisticated fraud, which went undetected over years, despite several audits by regulators. A tip-off by an alert industry participant led to the uncovering of the fraud by ASIC.

“The details of this case, including the sad loss of capital and destruction of investor savings, remind us that vigilance and higher standards are required in the system. Australia is a global model for retirement savings, but is also the target for offshore attack from predators.” 

FPA acknowledged the PJC recognition of the FPA’s position calling on higher standards for related gatekeepers including regulators, auditors, custodians and research houses.

Together with the Richard St John report there is now improved public awareness and acknowledgement that consumers must be protected from all participants – including financial planners – within the financial services sector.

FPA supports the PJC recommendations, in particular the specific recommendations related to Self Managed Super Funds, increased disclosure, improved checks and balances to better detect signals and greater powers and emphasis on superannuation fraud by the regulators and the Australian Federal Police (AFP).

St John compensation recommendation
The FPA further supports the PJC recommendation against the need for a compensation scheme, a finding which mirrors recent recommendations by Richard St John.  A separate levy on SMSFs would not be appropriate and potentially undermine the reasons of choice and flexibility which lead many consumers to invest in a SMSF.

The FPA agrees with the committee’s assertion that financial professionals such as financial planners and accountants need to act in the client’s best interest when recommending a SMSF to clients.

The FPA strongly believes that FOFA along with the removal of the accountant’s exemption will go some way in helping with this.

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Mr Andrews was a non executive director between November 2005 and January 2006 and then again from July 2006. He was Chairman of the board of Trio from February 2007. He was also chairman of the Investment Committee of Trio and a member of the Risk and Compliance Committee of Trio. Mr Andrews has agreed not to act in any role within the financial services industry for nine years. With the exception of a small private company in which Mr Andrews is sole director, he has also agreed not to act as a director of any corporation for nine years.

ASIC Chairman, Greg Medcraft, said: ‘We believe Mr Andrews failed in his duties as officer of the responsible entity of the Astarra Strategic Fund and therefore it’s inappropriate for him to be involved in the financial services industry or act as director. This is the fifth outcome arising from ASIC’s investigation of Trio Capital and its related entities as we continue to hold gatekeepers in the financial services industry to account. Also, it comes on the eve of the sentencing of Shawn Richard, investment manager of the related Astarra Strategic Fund.’

Today’s announcement follows the EUs entered into with former Trio directors Rex Phillpott and Natasha Beck last month, the EU from Kilara Financial Solutions Pty Ltd, the Australian financial services licence suspension of Seagrims Pty Ltd and the financial services banning of the directors of Seagrims.

Mr Shawn Richard has pleaded guilty to two charges of dishonest conduct in relation to his role as a director of the investment manager of the Astarra Strategic Fund. Mr Richard is currently in custody and due to be sentenced on Friday 12 August 2011.

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From mid December, each member’s initial account, which total approximately A$200 million of unimpaired assets overall, will be transferred to AMP SignatureSuper in tranches and invested in an investment profile comparable to their previous investment. The fund will be known as the Alliance Superannuation Plan.

AMP Director Product Manufacturing Paul Sainsbury said he was pleased AMP was selected as the preferred ongoing superannuation provider, following a rigorous assessment process by ACT Super.

“AMP SignatureSuper is a strong product which offers its members a choice of 69 investment options and value for money, backed by a pre-eminent brand,” Mr Sainsbury said.

AMP is one of Australia’s largest superannuation providers and one of the country’s top investment managers with A$111 billion (as at 30 June 2010) in assets under management and more than 3.8 million customers.

SignatureSuper, AMP’s flagship corporate superannuation product is one of Australia’s largest super funds with approximately $6.4 billion (as at 30 June 2010) in assets.

On 16 December 2009 APRA appointed ACT Super as the acting Trustee of the Trio superannuation funds when it went into liquidation.

The Trio superannuation funds include: Astarra Superannuation Plan, Astarra Personal Pension Plan and My Retirement Plan, including Seagrims Retirement Plan, TIC Super and Titanium Retirement Fund.

“Our aim is to make the transition process straight forward while also ensuring our new members can access their account as soon as possible following the transfer of assets and appropriate reconciliation,” Mr Sainsbury said.

All the typical features of AMP SignatureSuper such as call centre, administration and on-line access will be available to these members. Once funds are fully transferred to SignatureSuper members will be able to update details, make contributions, investment switches or withdrawals.

AMP will be communicating with individual members shortly, initially providing a detailed information kit and access to online services through Member Central and MyPortfolio.

Members requiring further information about this transition to AMP SignatureSuper can call AMP direct on 1300 506 445.

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