News Round Up: July 9
Ex-adviser back in court; An adviser is not a salesperson; Guardian Trust looks for more AFAs.
Monday, July 9th 2012, 9:37AM
Ex-adviser due back in court
A former financial adviser accused of swindling $5 million from his clients is likely to enter pleas on Serious Fraud Office charges next week.
Evan Paul Cherry appeared in the North Shore District Court last week, where his lawyer Matt Dixon told the court Cherry would be meeting with the SFO with a "resolution" likely as a result.
Cherry will appear again this Thursday and SFO prosecutor Todd Simmonds said he hoped the 54-year-old would enter a plea at that hearing.
The SFO has laid seven Crimes Act charges against Cherry relating to the alleged theft of investor funds and false statements in investor reports.
Through various companies including Investment Solutions Limited he received up to $9 million from 175 investors, mostly family and friends.
However, the SFO alleges that at least $5 million of these funds were not invested in accordance with investment instructions.
He was initially given name suppression, which was lifted last month.
An adviser is not a salesperson
Regardless of how they are licensed a salesperson is not an adviser and an adviser is never a salesperson, according to corporate lawyer Brian Henry.
Henry, who is also a director of fund management firm Goldman Henry, wrote in a submission on the FMA's KiwiSaver distribution guidance that much of what passes for financial "advice" in New Zealand is actually selling of financial products.
"The law has always ignored nomenclatures; it looks at the true legal relationship... the word "adviser" is, in the financial industry, used as a nomenclature to describe the true legal relationship which is vendor/purchaser of a financial product.
"The FMA needs to analyse what the industry is actually at law doing, not what it says it is doing."
He said that having a licence by any name has "no effect" on the actual legal relationship, which is determined by the intent of both parties.
"The legal consequences need close analysis and the question asked "what is the true legal nature of the relationship between the "adviser" and the client"?"
Guardian Trust on the lookout for AFAs
Guardian Trust, which has 59 AFAs is training up another nine advisers to become authorised, according to general manager client services Phil Morgan-Rees.
However, he said Guardian Trust was also happy to recruit existing AFAs from outside the company if they were suitable and there was a need to fill.
"We have recruited individuals who have come to us with authorisation; it starts with what's best for our clients," he said.
"As things change no organisation stands still; we do keep an open mind to individuals who would suit Guardian Trust and have got trust experience. We are recruiting in one of our offices."
|« Risk profiling ‘astrology’ fails clients||Fund managers call for level playing field »|
Commenting is closed
|Printable version||Email to a friend|