Accountingand financial planning consolidatorStockfordhas given its principal advisers the option to buy their businesses back from the group, in what could be the beginning of the end for the troubled company.
Stockford outlined the option to its principals at a series of meetings across the country over the past few weeks, where it also detailed an offer for the businesses from rival financial planning dealership Investor Group (IGP).
It is understood IGP, which indicated earlier this month it would make a bid for parts of the troubled group, had originally offered Stockford a cash sum, as well as shares in IGP, for each Stockford practice choosing to switch over to IGP.
It is believed IGP has since added to its bid by offering IGP shares to individual Stockford principals, after the initial offer received a lukewarm response.
It is also understood that another financial planning dealer group, Fiducian Portfolio Services, had been interested in bidding for Stockford practices, but it is believed Stockford favoured the IGP offer.
Stockford principals contacted byMoney Managementsay the option to buy back their businesses has been pitched as an alternative for those who choose not to accept the IGP offer.
They say the option, as well as the buy out offer from IGP, could spell the end of Stockford in its current guise.
The news comes amidst a renewed push by some former and current Stockford principals to mount a class action against the group and its directors.
A spokesperson for the group considering the action, who did not wished to be named, says the move was aimed at assisting “shareholders and principals, many of whom had lost substantial monies, their businesses, their life’s work and their income”.
The spokesperson says many principals were induced to join Stockford by promises they allege did not materialise.
Stockford listed on the stock exchange in November 2000 after convincing principals of accounting and financial planning firms to sell their businesses to Stockford in exchange for shares in the group. But the model failed, leaving a trail of disgruntled advisers in its wake.
Stockford shares, which reached a high of $2.10 in February 2001, have traded for as little as three cents in recent weeks.
