Pillemer denies funding search

Centric Wealth has strenuously denied it is seeking extra cash to keep the dealer group trading.

Money Management understands the multi-faceted financial services company was seeking to raise $15 million last week by approaching both local and international banks.

There had been suggestions that if this sum could not be raised, Centric might have to seek protection from its creditors.

However, Centric chief executive officer Michael Pillemer denied the company was in strife.

“Both of those points are absolutely incorrect,” he said.

“It would appear that someone is either speculating or trying to destabilise our business and has given Money Management an incorrect and negative impression of our true position.”

The planning industry has come under pressure in recent month as revenues fall due to clients’ portfolios dropping in value.

Money Management understands dealer groups are particularly being hit by the drop in platform rebates.

These rebates are paid either on the volume of business the dealer group is putting through the platform or the value of the funds under administration held by the group.

According to Money Management’s platform survey this year, inflows to platforms were down to $25 billion in the March quarter this year compared to $50 billion at the end of the 2007 financial year.

Since June this year, the value of investments on platforms has plummeted and advisers report there has been almost no investment money from clients in the past few months.

Centric Wealth was in the Money Management’s Top 100 dealer groups with a ranking of 63.

At June 30 this year, it had $5.4 billion in funds under administration from 4,000 clients.