A commission by any other name
The Financial Services Guides (FSGs) issued by advice groups associated with Astarra Capital have pointed to a variety of payments made by the product issuer to attract custom.
The FSG issued by advice group Tarrants pointed to a substantial "marketing allowance" it received when advising clients to invest in the Astarra Strategic Fund, with Tarrants receiving a payment of 3.3 per cent of all client monies placed in the fund. The FSG pointed to the fact that this payment would be made from the responsible manager of the fund "to a related party of Tarrants".
The Astarra Strategic Fund is at the centre of current regulatory attention, with regulators and Trio Capital's administrators still unable to locate its foreign assets.
Titanium Planners, a group based in Camden in NSW, said it had a relationship with Astarra Asset Management and Astarra Capital in an FSG issued last year.
In disclosing conflicts of interest, the group pointed to substantial "loans" it could receive for setting up a Titanium-branded Astarra-backed superannuation fund.
"Astarra Asset Management, or Astarra Capital Limited or their nominee may provide a significant loan of $50,000 to $1.5 million to [Titanium Planners] for the purpose of creating, researching, staffing and the structuring and establishment of a retirement fund (Titanium Retirement Fund)."
The group said the Titanium Retirement Fund had been "designed specifically to accommodate requests and suggestions by superannuation members and financial advisers".
"[Titanium Planners] expects to receive 0.25 per cent of the administration fee once the product has been launched this year [2009]."
Following the focusing of regulatory attention on Trio Capital last year, the Titanium board said the Titanium Retirement Fund and its investors had not had any exposure to the Astarra Strategic Fund or any other funds managed by Astarra. A Titanium spokesperson said the group had been negotiating with Astarra as it looked to appoint a responsible entity for its fund, however, it had not moved past the "preliminary negotiation" stage.
Nonetheless, the information provided in the FSG pointed to the scale of the payments the group could have received had it proceeded with the product issuer.
The FSG issued by Dominion Admin Services, a firm based in Wollongong, NSW, also revealed the payments made by Astarra Capital.
The Dominion FSG, dated March 2009, said the group had an "association with Astarra Capital Limited, the issuer of the Astarr range of products (which includes the Astarr Superannuation Service and Astarr Portfolio Service)".
In an unusual twist, Dominion authorised Astarr Capital Pty Ltd as an authorised representative under Dominion's AFSL. The fairly limited authorisation of Astarr allowed it to provide general product advice, arrange for a person to deal in a financial product, and apply for, acquire, vary or dispose of financial products on behalf of another person.
The Dominion FSG stated that the group "authorises Astarr Capital Pty Ltd, who is the portfolio manager for the Astarr range of products". Astarr Capital would then receive a portfolio manager fee of up to 0.5 per cent of the total portfolio value of the Astarr range of products, the FSG stated.
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