The future direction of dealer group Wright Global Investors (WGI) will change, with one of its new directors electing to voluntarily surrender the company's Australian financial services licence and cut loose all of its financial adviser network and management team.
WGI director Graham Kinder told InvestorDaily he had released the group's 60 financial planners and all of its staff after determining the dealership could no longer provide the level of services that should be expected by a team of professional advisers.
"It became quickly evident that the company did not have readily available all of the resources and information it would need for the future, so I immediately took steps to outsource the administration, commission processing, and took action in the Supreme Court of New South Wales to try to protect and secure as much of the company's assets as I could," Kinder said.
"That action took the best part of a month before we were satisfied that we had secured as much information as possible, from which we could better evaluate what was going on in the business. We formed the view that to pursue things in court would end up costing the company more money than it might likely recover even if it was successful."
He said the court handed WGI consent orders that were confidential.
Kinder is unable to comment on the orders or how they may relate to former WGI chief executive Mark Schroeder.
"Advisers are now free to go wherever they want - they have been released and there are a number of places where they are headed," he said.
"The previous management had already started a process. I guess a number of advisers were going down that path anyway.
"There seems to be a number of them going to iPraxis. One can only speculate why that's happening."
Kinder would not be drawn on speculation that iPraxis was a financial planning company headed by a former Financial Wealth adviser with links to Schroeder.
As part of the decision to release all advisers, it was apparent to Kinder and Peter Wood that Wood's role as company director and adviser development consultant was no longer required. Wood elected to resign as director of the company last week.
"The WGI licence has been surrendered. There are a couple of other areas that I need to resolve, there are a couple of other assets that the company purchased that I am just tidying up, and when all those things are resolved, I will decide whether to move the company in a new direction or just wind it up."
He said he was encouraged to join the WGI board by former principal and Astarra Asset Management chief executive Shawn Richard.
"Because WGI was a business he was concerned may be stepping into the grey, he asked if I would consider getting onto the board to ensure it was kept on the straight and narrow. He didn't want to be a party to anything wrong," he said.
He said from about the end of the first week of his directorship, Kinder initiated discussions with ASIC to keep it apprised of what WGI was doing.
"I have tried to continue a line of discussion with ASIC," he said.
"I was concerned to ensure that advisers and clients were protected. Obviously, the company never touched client money. What I did do was reasonably determine that the company never had any Astarra products on its approved product lists."
Schroeder was removed as chief executive of WGI in June, ASIC documents said.
