Wright Global Investments chief resigns

No client contact

By Kate Kachor & Vishal Teckchandani
Mon 26 Jul 2010

Ex-Astarra executive moves in on Wright Global Investments, forcing the resignation of its chief.

Former Astarra Asset Management executive Peter Wood has assumed control of dealer group Wright Global Investments (WGI), forcing the resignation of its chief executive Mark Schroeder.

In a letter to WGI advisers, obtained by InvestorDaily, Wood, the former Astarra Asset Management head of distribution, and Graham Kinder said they had replaced Schroeder at the request of the company's shareholder, Astral Investments Limited.

"Mark Schroeder has been advised of his replacement and asked not to contact any of the advisers or clients," the letter said.

"Further interaction with WGI should be through Graham and I exclusively until we advise otherwise. In the meantime, I request that you let me know if there are any unauthorised communications directed to you in relation to WGI business."

It is understood that in the New South Wales Supreme Court last week, Wood and Kinder moved to serve a week-long injunction against Schroeder, preventing him from contacting WGI advisers and clients.

As well as replacing Schroeder, Wood and Kinder reinstated former WGI compliance consultant Jillian Lees.

It is understood Schroeder resigned from his chief executive post before being removed as director of WGI.

Wood and Kinder removed Schroeder as WGI's sole director on 22 June, according to ASIC documents.

It is not yet known why Wood and Kinder replaced Schroeder.

It is believed Schroeder has also resigned as an authorised representative of the firm, with a number of now former WGI advisers following him.

Unconfirmed reports claim that at least 20 of WGI's 60 authorised representatives have contacted ASIC over complaints commission payments have stopped since Wood and Kinder took over WGI.

In the letter, Wood claimed he and Kinder had "extensive knowledge" of the financial planning and superannuation sector. However, the letter makes no reference to Wood or Kinder's past knowledge.

Wood is perhaps best known as former Astarra head of distribution, a company led by former chief executive Shawn Richard.

In September last year, Richard and Wood announced Astarra had signed a deal with WGI and South Australia-based dealer group Seagrims to provide white-labelled Astarra funds.

Earlier this month, Richard, the former Astarra and Trio Capital executive, confirmed Trio provided financial support to financial services groups including Seagrims and Tarrants.

Richard made the admission in the NSW Supreme Court as part of liquidator PPB's examination into Trio's collapse.

Robert Newlinds SC, acting for PPB, grilled Richard about the arrangements it had with groups including Seagrims and Tarrants.

Richard, speaking under court privilege, said: "Seagrims, during the course of the transitioning strategy where [they were] moving substantial funds from other product providers to Trio-related funds, asked for financial assistance in the form of a loan. It was definitely agreed that it was a loan."

He said the relationship with Seagrims was "strong enough" whereby there was no documentation attached to the loan, and there was a "handshake agreement" where the financial services group would repay the loan when it could.

Seagrims founder Peter Seagrim said: "The financial assistance which was for a small amount was against an advance on future earnings has been paid in full."

Trio was placed into liquidation in June 2010, six months after regulators froze its Australian financial services licence and suspended it as the trustee for over $300 million worth of superannuation money.

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