Basis for Astarra recommendations were sound
Tarrants was not the only financial planning firm to recommend clients invest in the Astarra Strategic Fund, and those recommendations were made following sound due diligence, according to Wealthsure’s Darren Pawski.
Wealthsure is the company that agreed to service Tarrants clients in the aftermath of Tarrants entering administration and amid reports that an estimated $180 million of funds invested through Astarra have disappeared offshore.
According to Pawski, Tarrants is one of a number of firms that have been caught up in the scandal.
He said Wealthsure reviewed about 100 of Tarrants’ former financial planning clients after its wealth management arm went into liquidation in July and agreed to service them. He added that following the review of the clients’ documents, it appeared that Tarrants had conducted full due diligence on the Astarra Strategic Fund, managed by now collapsed Trio Capital.
Pawski added that Tarrants had recommendations regarding Astarra from researchers van Eyk, Aegis and Morningstar.
“They went through and did a full due diligence – they had all the research and they’ve done the due diligence themselves,” Pawski said. “So they haven’t just gone and put their clients' money in something that they thought was a bit shonky. It was a very well-rated fund.
Morningstar editor and communications manager Phillip Gray asserted that Morningstar never researched or rated Astarra. He said Aegis came under its banner after Aegis had researched the fund, which may have led to some confusion among advisers.
Pawski said product failure was the key to Tarrants' demise, and he didn’t see it being a result of poor management.
Following the review of its former clients, Pawski couldn’t say what their overall concerns were as not all of them were invested with Astarra.
“The way that it’s been painted is that every client got burnt with Astarra and lost all their money, but that’s not the case,” he said. “We are now giving advice to Tarrants’ clients and we found that there’s been some good advice given and not all clients are affected by Astarra. They’ve got needs like any other client.”
Pawski noted that Tarrants had been around for a long time, with some client relationships lasting 20 years.
“Take Astarra out and there wouldn’t have been anything to write about and it would have been business as usual for Tarrants,” he said. “That’s the unfortunate part for these guys – they did get involved with what happened to be a company that is possibly one of the worst frauds in the industry’s history.”
Recommended for you
With the final tally for FY25 now confirmed, how many advisers left during the financial year and how does it compare to the previous year?
HUB24 has appointed Matt Willis from Vanguard as an executive general manager of platform growth to strengthen the platform’s relationships with industry stakeholders.
Investment manager Drummond Capital Partners has announced a raft of adviser-focused updates, including a practice growth division, relaunched manager research capabilities, and a passive model portfolio suite.
When it comes to M&A activity, the share of financial buyers such as private equity firms in Australia fell from 67 per cent to 12 per cent in the last financial year.
