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New evidence has emerged pointing to the seemingly unconventional relationship between the Association of Independently Owned Financial Planners (AIOFP) and the now defunct fund manager Trio Capital, formerly known as Astarra Capital.
The chair of the AIOFP’s investment research committee, Rob McGregor, was also an asset consultant to Astarra Asset Management.
The AIOFP established its Filtered Research Committee (FRC) in September after flagging its creation in June last year. The FRC was designed to provide research and construct an Approved Product List for the association’s financial advisers, which it numbers at 2,000.
The AIOFP described McGregor as an “independent research analyst”.
A cached version of Astarra Asset Management’s website pointed to the appointment in July 2009 of McGregor Asset Consulting as asset consultant to the Astarra Diversified Funds. Under Astarra’s managed fund product list, it named the Diversified Funds alongside its Strategic Fund, the fund with $118 million of investors’ funds now missing.
McGregor Asset Consulting changed its name from McGregor Research in August 2009.
McGregor was on the conference trail in the latter half of last year. In his presentation to the Association of Financial Advisers conference in October, McGregor recommended advisers “outsource via diversified funds”, naming Astarra alongside Russell Investments.
McGregor also presented at the AIOFP’s conference in March last year and was named on the attendee’s list for the association’s September conference on the Gold Coast, along with Astarra chief executive Shawn Richard and distribution head Peter Wood.
In September last year Richard said Astarra Asset Management had reached $1 billion in funds under management, pointing to recent growth “generated by growing interest from financial planners in its flagship multi-sector funds”.
AIOFP members account for a large portion of the money invested with Astarra.
At the time of its launch, AIOFP executive director Peter Johnston said the FRC would use an “independent third party with no [product] manufacturer ownership” to provide recommendations to AIOFP members.
In promoting the FRC, the AIOFP said an adviser reliance on traditional research houses had “largely failed due to remuneration conflicts and irregular monitoring and surveillance of products, markets and strategy”.
Johnston said the “independently owned advisory market had lost faith in retail research houses after years of … conflicts of interest”.
The AIOFP said the FRC would provide its subscribers with “full Statements of Advice inserts”, “best of breed” products and model portfolios and “political and practical support from the AIOFP board”.
Along with McGregor as chair, the FRC committee consisted of three “competent AIOFP committee members”, with mainstream research house Mercer acting as “the primary filter and consultant to the board”.
On the announcement of the Mercer/AIOFP relationship, Mercer executive Richard Everingham said “the decisions of the FRC will be the responsibility of the AIOFP”.
McGregor was the head of research at Morningstar before being redeployed within the organisation in 2001.
