Federal Court appoints receivers to uncover $1bn from global advisory group
The Federal Court has appointed two corporate receivers of Brite Advisors to investigate the $1 billion client pension funds under its management.
On 27 October 2023, global advisory firm Brite Advisors was ordered by the Federal Court to freeze its funds and assets for failing to lodge financial statements.
The firm provides advisory, pension administration and asset management services to clients in Australia, the UK, the US, Switzerland and Hong Kong and also offers an investment platform to self-invested personal pension providers and self-managed super funds (SMSFs).
The Federal Court has since chosen Linda Smith and Robert Kirman of McGrathNicol as corporate receivers and managers of Brite Advisors’s Australian financial services licensee (AFSL).
The receivers are tasked with conducting further investigations into Brite and the approximately $1 billion client pension funds under its management. They are to provide a report to the Court and to ASIC on their investigation within 42 days.
“In making the orders appointing receivers, the Court noted that the concerns raised by ASIC, and those raised by the Investigative Accountants, were both wide-ranging and serious, and required further detailed investigation,” the statement said.
“Amongst the concerns is a significant variance in an amount of USD $69 million in client funds which had not been adequately explained by Brite. There are also significant concerns over the management of Brite.”
The regulator initially applied for the orders for Brite Advisors because it was concerned:
- The current financial position of Brite is unknown, as Brite has failed to lodge with ASIC its financial statements and auditors report for the financial year ended 30 June 2022; and
- The value of Brite’s funds under management has not been reported by any entity within the Brite Group in an audited balance sheet since December 2019.
The Court re-made asset preservation orders restraining Brite but enabling the receivers to carry on the operations of Brite. ASIC has taken these steps to protect client assets, and the management of those assets, on an ongoing basis, while the investigations continue.
ASIC’s investigation is ongoing.
AUTHOR
Jasmine Siljic
Recommended for you
Far too few wealth managers are capitalising on the opportunity presented by disruptive technology to deliver personalised investment solutions to the mass affluent demographic, according to PwC.
With over half of advisers using managed accounts, HUB24’s head of managed portfolios has unpacked the benefits driving their usage and how they can be leveraged by advice practices.
The FSCP has announced its latest verdict, suspending an adviser’s registration for failing to comply with his obligations when providing advice to three clients.
ASX-listed platforms HUB24, Netwealth, and Praemium have used their AGMs to detail how they are using artificial intelligence to improve their processes and the innovative opportunities it presents.
