ASIC has been asked to investigate the activities of financial services firm Solutions Wealth Strategies (SWS) and possibly its former managing director, Maurice Terreiro, after receiving a number of complaints against the group.
InvestorDaily can confirm seven of SWS’s former advisers have lodged official complaints with the corporate regulator against SWS and its financial planning dealer group Financial Wealth.
The complaints relate to a number of alleged breaches of conduct by SWS and Financial Wealth while the advisers were employed with the firms.
Among the more than 20 alleged breaches the advisers have claimed are: SWS has not conducted adviser audits for the past two years; SWS has not maintained, properly researched or updated its approved product list; SWS has insufficient professional indemnity cover; and SWS’s annual FS70 and FS71 audit reports have been falsified to the auditors.
One adviser complaint, obtained by InvestorDaily, showed the adviser had also contacted the Australian Federal Police, Financial Industry Complaints Service (now Financial Ombudsman Service) and state police regarding complaints against SWS and Financial Wealth.
“I believe that the SWS management have neglected to inform ASIC of the fact that Maurice Terreiro is now bankrupt and still controlling this AFSL (Australian Financial Services Licence) and responsible for clients’ money and investment interests,” the adviser wrote in his complaint to ASIC.
“I believe that there is one AR (authorised representative) holder left that is now responsible for the advice and review given to Australian clients from across the country.”
The adviser claimed that during his time at SWS only one compliance audit was conducted and the firm currently had no compliance manager.
He also claimed clients continued to receive statements from product providers stating the adviser was still their servicing adviser for the product, when in fact the adviser was no longer with the firm or on the SWS AR register.
SWS was misinforming clients regarding who was actually servicing them and it was collecting revenue from clients for advisers that had left more than a year ago, the adviser claimed.
“This is a clear breach of disclosure. Much of the revenue of this AFSL is being contested in the courts and should the claims be successful, cash flow for the AFSL I would think is negative with legal costs awarded,” the adviser’s complaint said.
