InterPrac sale raises fresh concerns over recovery for Shield investors
InterPrac Financial Planning, whose clients made up more than half of the investors caught in the Shield and First Guardian collapse, has been sold for $200,000. The sale has prompted concern that investors may have fewer ways to recover losses, after Sequoia Financial revoked a guarantee covering InterPrac’s obligations.
About 12,000 Australians invested a total of $1 billion in the failed funds, with more than 6,000 linked to InterPrac. Investor advocate Melinda Kee says the revoked guarantee could affect claims above the Compensation Scheme of Last Resort’s $150,000 cap, which she says has no funds available for the rest of the financial year. The buyer, Bellbird Australia, was registered shortly before the sale and is controlled by Sequoia founder and former chief executive Scott Beeton; the article also notes that ASIC had intervened in an earlier proposed sale.
- InterPrac was sold for $200,000.
- Sequoia revoked its guarantee covering InterPrac.
- Investors worry about recovering losses above $150,000.
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Shield and First Guardian were investment funds that collapsed after Australians put money into them on the advice of financial firms. InterPrac Financial Planning advised more than 6,000 of the roughly 12,000 investors affected, making it a central firm in questions about how the losses might be addressed.
Investors may seek compensation through the firms involved or through Australia’s Compensation Scheme of Last Resort, which has a limit of $150,000 per claim. The scheme is intended to provide compensation in some cases where a financial firm cannot pay, so the resources and obligations of firms connected to the advice can matter to people seeking to recover larger losses.
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The case for
Investors may have fewer practical avenues to recover losses after InterPrac’s sale, particularly if Sequoia’s revoked guarantee leaves claims above the compensation scheme’s $150,000 cap without another source of payment. With more than 6,000 affected investors linked to InterPrac and the scheme reportedly out of funds for the rest of the financial year, the sale’s low price and the buyer’s connection to Sequoia’s founder may reasonably prompt scrutiny of whether investor protections have been preserved.
The case against
The reported facts do not establish that the sale itself removes investors’ legal claims or that the guarantee’s revocation will prevent recovery; those outcomes depend on the obligations that remain and any other avenues available. A low sale price and the buyer’s connection to Sequoia’s founder may warrant examination, but do not alone show that the transaction was improper, and the compensation scheme’s temporary funding position does not by itself settle investors’ longer-term prospects.
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Originally published by Daily Mail as “Thousands of Aussies caught in Shield and First Guardian collapse dealt fresh blow after financial firm sold”.