Couple loses almost $1m in superannuation through investment with financial adviser
Barbara Brann should be enjoying a comfortable retirement, but instead the 72-year-old has to watch every dollar after losing most of her superannuation in a failed investment run by a financial adviser.
The loss has taken the Townsville great-grandmother to some dark places.
“He nearly killed me,” she told 7.30.
“I was very, very low. The hurt and the sense of betrayal is what gets to your soul, that someone could be so cruel.”
Ms Brann was a client of financial adviser Lee Robin, the Brisbane-based director of a company called Protect Ensure.
Ms Brann’s accounting firm estimates she, along with her husband Paul, invested more than $775,000 over several years through their self-managed super fund.
That investment now appears to be worthless after Protect Ensure went into liquidation midway through 2015 and Mr Robin received a lifetime ban from the corporate watchdog, ASIC, for misleading and deceptive conduct.
The liquidator, BCR Advisory, found more than 40 unsecured creditors were owed $4.1 million by Protect Ensure.
Last year Mr Robin allegedly told the Branns he had found a buyer for their home, but Ms Brann alleges that when the sale contract arrived they realised Mr Robin was the buyer and they backed out.
An investigation by 7.30 has uncovered new claims about Mr Robin’s conduct and can reveal he is in bankruptcy for the second time.
‘It completely ruined us’
Ms Brann alleges ASIC never told her about Mr Robin’s ban, so she continued to deal with him.
The corporate watchdog does not dispute this, and says in a statement it does not advise clients of action taken against their advisers but does put out a media release.
The Branns have received advice their losses from the Protect Ensure investment, including interest, could be more than $930,000, which represents a lifetime of hard work in early childhood education and remote Indigenous communities.
Ms Brann has made a complaint to Townsville Police about alleged misappropriation of funds by Mr Robin.
Queensland Police confirmed investigations by the criminal investigation branch were ongoing.
“It’s completely ruined us. I would say there is no future, there is nothing beyond today,” Ms Brann said.
“We’ve saved every cent of our lives and at our age we are broke,” Mr Brann added.
“We’ve spent $30,000 on lawyers and accountants to find out what a shithole we’re in and nobody cares, nobody is doing anything.”
Mr Robin declined to be interviewed by 7.30 and instead provided a detailed statement.
He said he was unaware of the police complaint by the Branns and could not comment further.
But he conceded the failure of Protect Ensure “had a devastating financial effect on investors like Mr and Mrs Brann which I regret and apologise for”.
The Branns allege that despite his ASIC ban, Mr Robin has remained in contact with them, something he admits because they “were long-term friends”.
Mr Brann alleged that contact included receiving an email from Mr Robin in October 2018 which said once the liquidation of Protect Ensure was finished they would be repaid.
The email allegedly from Mr Robin, which has been provided to 7.30, said:
“Once this is finalised I will bring back the assets from a third party and revalue and draw against to pay balance of investors back.
“I haven’t shared this with the liquidators so we need to keep this under the radar.
“This has taken alot (sic) longer than we strategically planned but we have to ride this out in order for everyone to paid in full.”
Mr Robin told 7.30 that at the time he wrote the email he “was looking at a transaction unrelated to Protect Ensure … if the transaction had proceeded it would have produced profits which I intended to use to pay back investors”.
“Regretfully the investment did not proceed,” he said.
Offer to buy house
According to the Branns, in May last year Mr Robin proposed an extraordinary solution to their dire financial situation.
They allege he suggested he had a private investor interested in buying their Townsville home which would be paid off in instalments while they continued living there rent-free for a period.
But Ms Brann alleges that when the sale contract came through they saw Mr Robin was the proposed buyer and they backed out.
“I took it straight to the solicitor and he said, ‘Don’t even touch it,'” she said.
“He said, ‘If he’s got $100,000 to give you, tell him to give it to you in cash.'”
Mr Robin does not dispute offering to buy the Branns’ house.
He disputed it was inappropriate for a banned financial adviser to attempt to buy a former client’s house after they had sustained significant losses, and did not say how he intended to pay for the home.
“The proposal was an attempt to get Mr and Mrs Brann a significant return over and above the value of their property,” he said.
Ms Brann complained to ASIC last year alleging Mr Robin continued to provide her with unlicensed financial services and continued to discuss her finances.
She also asked them to investigate an accountant who was involved with their self-managed super fund, alleging he was continuing to discuss their finances with Mr Robin.
However, she was disappointed when the regulator declined to investigate citing a lack of evidence to prove misconduct because advice to sell property, which is not a financial product, is not considered a breach of the ban.
Barrister and former ASIC investigator Niall Coburn believes the watchdog made a mistake and should reconsider pursuing a criminal prosecution based on the Branns’ investment history.
“That correspondence indicates that ASIC did not have the interest to go that extra mile to make sure that it put a criminal brief together,” Mr Coburn said.
“The intention of the legislation … is to protect mum and dad investors.”
‘ASIC should be a bulldog’
ASIC first took action against Protect Ensure in September 2014, suspending its financial services licence.
With his business under scrutiny, Mr Robin acted quickly and just weeks later he wrote to investors telling them of a new proposal.
“… three of Protect Ensure’s most senior financial advisers will be authorised by another Australian financial services licensee,” the letter said.
According to the liquidator, BCR Advisory, Mr Robin arranged for another financial planning company to look after the commissions for Protect Ensure clients before later negotiating a sale of the client book to another firm, Southern Cross Financial Advisers, in May 2015.
The liquidator, Geoff Davis, reported to creditors these moves by Mr Robin had resulted in complications in recovering some of the money they were owed.
Mr Davis alleged commissions were paid to the wrong financial planning company and, despite using a debt collector, they were unable to recover the funds.
In June 2015 ASIC acted again, this time banning Mr Robin from providing financial services for life.
It found he had dishonestly used clients’ money for personal expenses and to pay other clients.
It also discovered Mr Robin had engaged in misleading and deceptive conduct by failing to provide an information memorandum to investors, and properly disclose his client funds would be pooled with other funds in his business.
7.30 understands the liquidator reported possible criminal and civil offences by Mr Robin to the corporate watchdog, but ASIC decided against launching a prosecution.
Mr Coburn argues that was a poor decision.
“It appears that there have been breaches of the criminal code, it appears that there have been breaches of the corporation act,” he said.
“It’s not enough just to slap an administrative banning order on a financial adviser where they are clearly acting in a dishonest way.
“They should be a bulldog, to take on this kind of dishonesty and make sure that these individuals are held to account.”
‘ASIC seem to have done very little’
Tom Skidmore runs a tyre business in Western Sydney and lost $70,000 in the Protect Ensure collapse, which was two thirds of his superannuation at the time he invested.
He is bitterly disappointed with ASIC.
“I cannot believe that ASIC themselves have seemed to have done very little to either hold that person to task or find out where that money is,” he told 7.30.
“That money was important to my financial wellbeing and my financial future and it’s now gone.”
Barrister and chartered accountant, David Morrison from the University of Queensland, also believes ASIC should take further action against Mr Robin.
“In my view, ASIC ought to reopen the investigation because there are too many loose ends and there’s too much gone wrong for this person (Lee Robin) simply to be let off with a ban on providing advice,” he said.
Mr Robin entered bankruptcy for a second time in February this year.
The trustee, Mitch Griffiths from Rapsey Griffiths, said in a statement Mr Robin owed unsecured creditors more than $1.2 million due in part to excessive borrowing.
Mr Griffiths also alleged Mr Robin had failed to disclose he held 12 bank accounts, which had since been reported to the Australian Financial Security Authority.
Mr Robin said this was an “oversight” because he had not used the accounts for years and he was cooperating with the trustee.
Investigations into what assets and money can be recovered are ongoing as part of the bankruptcy.
Mr Robin’s first bankruptcy went from September 2016 until November 2017 when he was discharged from it.
The trustees, Andrew Heers and Mark Pearce, alleged in a report that in November 2015 Mr Robin transferred his interest in his Camp Hill home to a family member in a transfer worth about $160,000.
Mr Robin denies this was done as an attempt to avoid paying creditors.
7.30 understands a confidential arrangement was agreed between Mr Robin and the trustees and overseen by the Australian Financial Security Authority in relation to the transfer.
ASIC declined to be interviewed for this story but provided 7.30 with a statement.
“ASIC conducted a thorough investigation resulting in the banning of Mr Robin from financial services, his disqualification from managing companies and the cancellation of Protect Ensure’s AFS licence, as well as the financial services banning of two authorised representatives of Protect Ensure,” the statement said.
“We did consider both civil and/or criminal action should be taken.
“ASIC took the action that was available on the evidence.”
It said complaints about taxation advice provided to the Branns by their former accountant should be addressed to the Australian Taxation Office and the Tax Practitioners Board.
Watch this story tonight on 7.30.