Former self-managed superannuation fund (SMSF) clients of financial advisers who lost more than $360,000 in the collapse of Trio Capital have called on the federal government to widen its investigations of negligence to research houses and industry regulators.
In submissions to the inquiry into the collapse of investment manager Trio Capital, to begin next month, three individual clients, two formerly of Tarrants Financial Consultants (TFC), said information provided to them by their financial planner to invest in the Astarra Strategic Fund (ASF), in their view, provided grounds for negligence.
TFC husband and wife clients Shayne and Tracey Bonnie lost $226,000 through the ASF, with the couple investing $169,000 from their SMSF and $57,000 using a margin loan.
The pair said positive reports from various research houses were used "extensively" and auditor reports indicated the fund complied with all requirements.
The Bonnies said while it was now apparent a fraud had been carried out, they questioned the lack of repercussions for Trio custodian National Australia Bank (NAB), auditors WHK and KPMG or research houses Aegis, van Eyk, Van Mac and Morningstar.
"We find it offensive to be referred to as investors 'swimming outside the flags', as government agencies ASIC and APRA have clearly not carried out due diligence," they said.
"How can SMSFs and private investors be portrayed as reckless investors when the regulated super funds that invested their clients' money in Astarra were not? If a retail fund cannot determine that the fund was a fraud, then how could we?"
A fellow unnamed TFC client, who lost close to $70,000 in ASF, also pointed the finger at research houses.
Phil Keeffe Superannuation Fund trustee Philip Keeffe, who lost more than $70,000, did not suggest his adviser, whose identity is unknown, engaged in any fraudulent activity, however, he said he did believe his adviser was negligent in making strong recommendations for the Trio fund.
Keefe said "this accusation of negligence" must also be directed to the regulatory authorities and to NAB.
A van Eyk Research spokesperson said at no time had the firm undertaken any investment research into either Trio as a fund manager nor any of the Astarra Capital products and funds that had led to a public rating of the fund manager or any of its products.
Morningstar Australia and New Zealand chief executive Anthony Serhan said Morningstar had not at any time published analyst research on or qualitative recommendations for Trio/Astarra Capital funds.
"Astarra funds did appear on the Morningstar database and Morningstar (star) ratings were generated for a number of these funds," Serhan said.
"The Morningstar rating is an assessment of a fund's past performance, based on both return and risk, and shows how similar investments compare with their peers. This is a quantitative measure which does not involve fund analyst input.
"The Morningstar recommendation is a fundamental assessment of a fund manager's ability to manage a particular asset class and is driven by analyst research. As stated at the start, we have never published a Morningstar recommendation on Astarra funds, nor included such funds in our model portfolios."
