FPA chair Julie Berry has lost her legal bid against three IOOF-owned firms over adviser service fee (ASF) payments allegedly owed to her for advice provided to clients.
Berry sought legal action in September last year against Questor Financial Services Limited (Questor), Executive Wealth Management Financial Services Pty Limited (EWM) and Bridges Financial Services Pty Limited (Bridges).
Berry claimed Questor was obliged to deduct 88 per cent of ASFs from those investors’ funds in products offered by Questor, and EWM/Bridges were obliged to pay them to her, court documents released in late December said.
Berry alleged that their failure to do so was in breach of trust and in breach of contract, the documents said.
Questor, EWM and Bridges denied they are obliged to deduct or pay the ASFs to Berry.
They claim they were only obliged to pay the ASFs to Berry while she remained an authorised representative of EWM.
Berry resigned as an authorised representative (AR) from EWM on 10 July last year to join rival financial services firm ComCorp, leaving the firms to believe they were no longer required to pay her ASFs.
However, as Berry still had around $29 million under management in Questor’s platform, The Portfolio Services (TPS), she attempted to strike a deal with the firm to continue receiving AFS, as well as continue to manage her clients’ money.
Berry submitted to the court a list of former Bridges/EWM ARs, including Australian Unity adviser Ross Johnston, who EWM continues to pay a proportion of its ASFs in respect of investors who have invested funds with Questor on the advice of those ARs of other Australian financial service licence (AFSL) holders.
Justice Bergin rejected this notion.
“I am not satisfied that the plaintiff has established that there was a term of the contract between herself and EWM that she would receive 88 per cent of the ASF whilesoever the investors maintained their investments administered by the defendants, irrespective of whether the plaintiff was an AR of EWM,” Bergin said.
Berry’s claims that EWM’s PDS, financial services guide and statement of advice did not contain the statement “if for any reason Ms Berry ceases to be an authorised representative of EWM, then we will cease to pay her” was classed as misleading or deceptive conduct was also dismissed.
Justice Bergin ordered Berry to pay Questor, EWM and Bridges costs of the proceedings.
Berry was not available for comment.
