Cash distribution plans and client statements for Brite Advisors

With a batch of updates in the past couple of weeks, we thought an outline of what had occurred may be helpful, as lots of documents have been added to the Recievers website. Importantly, a distribution framework was submitted to the Court on 8/9th August, and we summarise what this means as it is the pathway to beneficiaries receiving cash and the ability to control their money as it is currently frozen.

This is part of a series of articles on the liquidation of Brite Advisers Pty

The main activities are efforts to manage Brite Advisors assets to meet client mandates, rebuilding data to allow for record-keeping reconciliations, preparing the latest court report

  1. The Receivers have been working on a distribution framework application to be filed with the Federal Court by 8 August 2024 (see more below), which aims to establish a framework and timeline for distributing the Client Assets under Management (Client AuM) held by Brite Advisors​. Preparation and anticipated filing of the Receivers’ Fourth Report to the Court and proposed orders, which include the distribution framework application.
  2. Trustees’ feedback through a Trustee Consultation Survey to inform the distribution methodology is pending. This was initially pencilled for June, and it’s possible that Trustees may ask beneficiaries for information. Pension trust are generally setup wit them have discretionary powers on pension schemes, so they can respond directly providing opinions based on the interest of beneficiaries.
  3. The Receivers negotiated access to Brite Advisors’ Interactive Brokers accounts, which enabled the initial portfolio rebalance managed by BML Funds Management Pty Ltd (BML) as the Interim Fund Manager. This included rebalancing the Client AuM to match the investment mandate. BML Funds Management continues to monitor and manage the Brite Advisors Portfolio, ensuring compliance with the investment mandate and executing necessary trades approved by the Receivers​. Regular valuation reports and performance updates are provided, including detailed weekly portfolio reports reflecting changes in portfolio value and market conditions. on the Receivers website.
  4. Efforts to resolve disputes with Interactive Brokers regarding margin loan balances, maintaining temporary cash arrangements to off-set these balances while legal challenges are ongoing.

Financial statements for QROPS Beneficiaries

since December 2024 actions to appoint receivers in Australia we believe valuations are being sent to beneficiaries with comments like the below because these is no client data to confirm valuations.

“The accounts of Brite PTY have been frozen since 27th October 2023. All financial information has been submitted for review by McGrath Nicol, the Court appointed Receivers and Liquidators, who are still underdoing their investigations into the matter. Due to this, we are unable to provide you with any valuations and transaction histories that are verifiable as at 31/12/2023”

Wording on some client statements

Distribution Framework: What It Means for You

As a beneficiary and member of a pension scheme, the distribution framework refers to the structured process and set of rules established by the Court and managed by the Receivers to ensure that the assets held in your pension scheme are fairly and transparently distributed to you and other members.

The Receivers website has a roadmap that was updated in April (a new version may be updated shortly) (https://www.mcgrathnicol.com/brite-advisors-pty-ltd-frequently-asked-questions/). This roadmap shows the main steps, and readers can examine where the Distribution Framework sits within the overall workflow.

What the Distribution Framework Looks Like for You:

  1. Initial Notification:
    • Trustees will receive communications explaining the distribution framework and what to expect during the process. This is likely to be shared with beneficiaries.
  2. Verification of Entitlements:
    • The Receivers will update and verify entitlements as of the specified date, likely the , ensuring the calculation is accurate and fair.
  3. Final Distribution:
    • Once the distribution framework is finalised and approved by the Court, you will receive your portion of the assets.
    • The distribution will be executed according to the verified entitlements, ensuring a transparent and equitable process.

Main Updates:

  1. Filing of Distribution Framework Application:
  • The Receivers have filed the distribution framework application along with the fourth report to the Court on 9 August 2024. This application seeks to establish the process and timeline for distributing the Client Assets under Management (Client AuM).
  1. Scheduled Court Hearing:
  • The Court has scheduled the hearing for the distribution framework application on 21 August 2024 at 9:30 AM (Australian Western Standard Time) / 11:00 AM (Australian Central Standard Time). The hearing will be livestreamed on the Federal Court of Australia’s YouTube channel.
  1. Framework Application Goals:
  • The application does not seek final orders for distribution but aims to establish a consultation period and a process for verifying beneficiary identities and entitlements. It also proposes an increase in the cap on regular pension withdrawals from 30% to 50% of a beneficiary’s model portfolio value as of 9 November 2023.
  1. Proposed Orders:
  • The Receivers are asking the Court to approve a process for identity verification, beneficiary entitlement verification, and to authorize an increase in the pension withdrawal cap.
  1. Publication of Report:
  • The fourth report to the Court will be made available on the Receivers’ website after the hearing, subject to Court approval.

Indicative Timetable:

  1. Framework Application Hearing: 21 August 2024
  2. Filing of Explanatory Memorandum Application: 23 October 2024 (63 days after the hearing)
  3. Explanatory Memorandum Application Hearing: 6 November 2024 (14 days after filing)
  4. Distribution of Explanatory Memorandum and Start of Consultation Period: 8 November 2024 (2 days after the hearing)
  5. End of Consultation Period: 17 December 2024 (39 days after distribution)
  6. Filing of Distribution Methodology Application: 15 January 2025 (29 days after the consultation period ends)
  7. Interested Parties Seek Leave to Appear: 29 January 2025 (14 days after filing)
  8. Interested Parties Leave to Appear Hearing: 5 February 2025 (7 days after seeking leave)
  9. Filing of Submissions and Evidence by Interested Parties: 19 February 2025 (14 days after leave to appear hearing)
  10. Filing of Receivers’ Submissions: 5 March 2025 (14 days after Interested Parties’ filings)
  11. Distribution Methodology Application Hearing: 12 March 2025 (7 days after Receivers’ filings)
  12. Court Judgment on Distribution Methodology Application: Date dependent on Court availability.
  13. Commencement of Client AuM Distribution: As soon as possible following the Court’s judgment.

This timetable is indicative and may change depending on various factors, including any disputes or feedback received during the consultation process.

Brite Advisor clients may get distributions for March 2025

Beneficiaries are likely to start receiving their distributions after the Court delivers its judgment on the Distribution Methodology Application, which is currently scheduled for March 12, 2025. However, the exact date will depend on several factors:

  1. Court Judgment Timing:
  • The Court’s judgment on the Distribution Methodology Application is necessary before any cash can be distributed. The timing of this judgment depends on the Court’s schedule and any issues that arise during the hearing.
  1. Implementation of the Court’s Orders:
  • After the Court delivers its judgment, the Receivers will need some time to implement the Court’s orders and start the actual distribution of funds. The Receivers will begin this process “as soon as possible” following the Court’s judgment, but it may take some additional weeks to process the payments, especially if there are a large number of beneficiaries or if any complexities arise.
  1. Verification and Dispute Resolution:
  • Beneficiaries need to have completed the identity verification process and confirmed their entitlements. If there are disputes or delays in this process, it could potentially delay the distribution for those beneficiaries involved.

Given this timeline, beneficiaries are likely to start receiving their cash distributions sometime in the weeks following March 12, 2025, assuming there are no significant delays in the Court’s judgment or in the implementation of the distribution process.

Do I need to get a financial adviser for the Brite Advisor Assets? Now or in the future?

At the time of writing any newly appointed advier cannot really add any value as the pensions are frozen. Based on the time schedule above there will be a time before.

Trustees will generally require that a financial advisor, who is approved by them and with which they have entered into a service level agreement, is involved in reinvesting pension assets suitably when they are received from the Brite Advisers Receivers. Reinvesting can be either using a suitable investment platform or transferring to a new QROPS with a new service provider and then using a suitable investment platform. The role of the financial adviser is to work with the client to ensure the most suitable investment platform, pension plan provider and be clear on fees with the client.

Trustee fiduciary duties and relevant regulatory requirements often mean they want clients to get advice from an independent financial adviser. Trustees will generally not provide advice and purely complete customer service duties which some clients can find complicated as simple questions can seen to get a reply where the trustee can not assist. This can be frustrating for clients but is a symptom of the role of the trustee as administrator, not a financial advisor. Having a pre-existing relationship with an approved adviser may streamline the decision-making process, ensuring that all actions taken are in the best interests of the beneficiaries while also adhering to regulatory standards set forth by authorities such as the MFSA in Malta or the GFSC in Gibraltar​.

Edale UK Management Limited (Our full registered company name) is available to provide expert advice on Qualifying Recognised Overseas Pension Schemes (QROPS) and is happy to engage in initial discussions without requiring a formal appointment. We recommend beneficiaries conduct their own due diligence when selecting us or another financial adviser. This includes performing thorough web searches, reviewing client testimonials, and verifying the adviser’s credentials on regulatory websites. For Edale UK Management, a check on the UK’s Financial Conduct Authority (FCA) website will confirm that we are a regulated firm and will also list the individuals within our team who are approved to provide financial advice. The expansion box below provides a sample of Expat Financial Advisor due diligence with Edale as a case study.

Due Diligence Process for Selecting a Financial Adviser

When considering Edale UK Management or any other financial adviser, it is essential to follow a thorough due diligence process:

  1. Web Searches: Conduct detailed web searches to find information about the adviser’s reputation and expertise.
  2. Client Testimonials: Review testimonials and case studies from current or former clients to gauge satisfaction and success stories.
  3. Regulatory Check: Verify the adviser’s credentials by checking the UK’s Financial Conduct Authority (FCA) website. You can confirm that Edale UK Management is a regulated firm and see the individuals approved to provide financial advice.

By completing these steps, you can ensure that you are making an informed decision when selecting a financial adviser.

Check FCA Register

On the page https://register.fca.org.uk/s/ you can enter an individual and firm to search for them. Below is a example for Edale Investments.

Three firms are identified and the first is the current regulated enterprise, reference number 812332. Clicking on that link will show the regulated activities of the firm – what it is able to do and restrictions on the firm. The second and third are legacy items covering the original appointed representative Edale had for the first few years of operation before becoming directly regulated. The second listing is a legacy holding with no data showing in the listing.

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Thank you very much Lawrie for your effective diligence!

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Very efficient and informative. Lawrie was a consumate professional and helped with my individual needs. Would definitely recommend!

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EDALE was very prompt in contacting me and quickly arranged a first appointment. I was on a short deadline and

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dual US/UK nationality family

Lawrie invested a great deal of time understanding our circumstances (dual US/UK nationality family) before any recommendations were discussed I

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I’m teaching overseas and Lawrie gave me great advice on insurances and investments, thank you for all your help.

Laura

I had a long conversation with Lawrie Chandler to explore the financial implications of moving my tax residency from the US to the UK. I found his knowledge of the pros and cons very helpful.

Some specialists in international relocation and tax affairs who will give only a short interview and are sparing in their

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Most helpful Knowledge and guidance offered through generosity and sincerity. Deeply appreciated blue ribbon customer service.

I’m currently going through a divorce and was in desperate need of financial help and guidance. I’m a US American

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My complications ended when I came across Edale

I worked in Australia for 2 years under the 456 visa. After I left Australia in 2012. I was looking

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