AQueensland-based financial planner has lodged a complaint with theAustralian Prudential Regulation Authority(APRA) alleging theMLCowned Flexiplan master trust acted in an irresponsible and possibly negligent way.
Neil Dearberg, an authorised representative with Vector Financial Consultants in Maroochydore, is alleging Flexiplan breached its duties as trustee of the Flexiplan Masterfund Superannuation Account, costing a dozen of his clients several thousand dollars each.
The allegations stem from the conversion of maturing Smorgon Steel Converting Preference Shares from one issue to the next through Flexiplan in March this year.
Investors, through Flexiplan, had the option to either convert their Smorgon Steel shares into a new series of converting preference shares, or to take up ordinary Smorgon Steel shares.
However, the ordinary share option was selected as the default option for investors who did not make a choice.
Dearberg is alleging the ordinary share option was a vastly inferior one and should never have been selected as the default, a situation that led directly to financial loss for his clients who did not make a choice.
However, MLC’s general manager of adviser solutions Dale Holmes says the allegations against Flexiplan are baseless.
He says the decision to choose the ordinary shares option as the default was made through a “due process”. A separate spokeperson for MLC has also claimed the decision on the default option was made by Smorgon Steel itself, and not Flexiplan.
Holmes says all financial planners, including Dearberg, were notified about the options available and were given ample opportunity to make a choice on behalf of clients. According to Holmes, Dearberg is the only adviser to have lodged a complaint on this issue.
“The adviser had the opportunity to make a call, but the adviser failed to come back to the trustee,” Holmes says.
But Dearberg is disputing that he ever received the communication from Flexiplan.
“Somewhere between their offices and ours, we never got that communication. They say they sent it. We can debate until we are old and grey whether they did send it. But the stronger issue is that they never had a mechanism for following up if they did not receive a reply back from advisers,” Dearberg says.
