Storm Financial software provider still active
Ignite Financial Systems and Research, an associate company of Storm Financial, has moved to the collapsed dealer group’s Brisbane offices.
According to Ignite’s application for an AFS licence, it is now based at No.1 Breakfast Creek Road, Newstead in Brisbane.
Money Management understands this is Storm’s Brisbane office and a number of its former authorised representatives also use this address.
A search of the Australian Securities and Investments Commission (ASIC) authorised representatives’ website found a number of former Storm planners giving the Newstead address as their place of business.
Originally, Ignite was based in North Sydney with its registered office in Townsville, which is still the case.
An ASIC spokeswoman confirmed the regulator had received an application for a financial services licence from Ignite.
The Ignite licence application is still being reviewed by ASIC.
“We are assessing the application, but no decision has been made about granting a licence,” she told Money Management.
Ignite Financial Systems and Research, which changed its name from Storm Research in 2007, made an application for a licence before Christmas.
At the time of the name change, Emmanuel Cassimatis was a director of the company and Michael Fenech was managing director.
Money Management is in the process of confirming if either is still involved with the company.
A lodgement last Friday changing some of the company details has been sent back to the company for clarification, an ASIC spokeswoman said.
Ignite’s relationship with Storm has centred on a software system called Phormula, which was used by the dealer group’s advisers.
Phormula is a financial planning software platform that Money Management understands is linked to the Macquarie Cash Management Trust.
According to Storm’s unsuccessful IPO prospectus, the software was licensed exclusively to the dealer group for two years as part of a five-year contract.
There were no licence fees paid by Storm during the first two years of contract, but if advisers charged a platform fee to their clients, Ignite received 35 per cent of the fee.
At this stage, it is not known what fees clients were paying for advice or use of the Ignite platform.
However, investors were paying 0.175 per cent of the gross asset value of funds invested in Colonial and Challenger index funds offered by Storm.
Storm received $67.9 million in trails and up front fees during 2008 and $12.3 million of commissions up to December 2008.
While it is not known how much of this commission revenue flowed to Ignite, the software company was receiving 0.33 per cent a year from Colonial on the total amount of branded index funds offered by Storm, which, according to the prospectus, was $7.5 million for the 12 months ending September 30, 2007.
It received 0.165 per cent from Challenger for its Storm-branded index funds, which added up to $1.2 million of commissions for the 12 months ending September, 2007.
Unlike Storm, Ignite is not in administration or receivership.
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