NextGen Financial Group enters liquidation
NextGen Financial Group has formally entered into liquidation after losing a Federal Court case regarding an unpaid Australian Financial Complaints Authority (AFCA) determination.
Following a hearing, a notice from ASIC stated that Joseph Loebenstein of Victoria-based Loebenstein Insolvency Services has been appointed as liquidator by order of the court. The firm is now in liquidation, since 17 November 2023.
In July 2023, the firm was ordered by the Federal Court to pay an SMSF trustee $270,000 over an unpaid AFCA determination regarding inappropriate financial advice.
In August 2016, WJ & V Drakoulis Super Pty Ltd (as trustee for the WJ & V Drakoulis Super Fund) received personal advice to establish an SMSF to purchase a residential investment property. However, there was a delay in the settlement of the investment property.
In the interim, the $175,000 that had been put aside for the property purchase was invested into Fund I for a one-year term, which meant the property purchase was unable to be completed.
In the Federal Court, NextGen argued the debt was not due and payable as an AFCA determination did “not have the effect of creating a debt enforceable by the way of a statutory demand”.
But Justice O’Callaghan ruled NextGen must pay the sum to the defendant.
The plaintiff in the case, WJ & V Drakoulis Super Pty Ltd, then applied for NextGen to be wound up as NextGen was unable to pay.
Tracing back to its foundation in 1985, NextGen has undergone numerous ownership changes.
It was formerly owned by Beacon, a subsidiary of Linchpin Capital led by Peter Daly.
Linchpin collapsed in 2018 and Daly was banned in November 2019 from providing financial services for five years, alongside former directors Paul Raftery and Ian Williams, for failing to act in the best interest of investors in managed investment schemes under their control.
In June 2020, it was acquired by US private equity firm Genesis Financial, a global financial services company focused on fintech-powered wealth management and direct-to-consumer lending platforms.
AUTHOR
Laura Dew
Recommended for you
The Institute of Financial Professionals Australia has partnered with advice fintech moneyGPS, giving its members and their clients access to the platform.
Two CEOs and a recent report have underscored how the current period of M&A, led by large buyer groups, is redefining the financial advice profession and creating a notable “purple patch”.
The FAAA has argued against “prescriptive record keeping obligations” in favour of advisers using their professional judgement.
Outsourcing company Vital Business Partners has taken a minority equity stake in a digital platform for financial advisers, which will help fund its future growth plans.
