May 27, 2009

Australia's largest financial planning network, Professional Investment Services, has suspended investments in the managed investment scheme (MIS) sector, striking a further blow to the industry in the middle of crucial fund-raising ahead of the end of the financial year.The Australian Financial Review reports that the decision comes as other advisers, including National Australia Bank's financial planning arm MLC, launch reviews of MIS projects that could result in the schemes being cut from their list of approved investor products within days.

MIS promoters have flourished on financial planners and accountants tipping clients into MIS projects in a bid to reduce client tax liabilities.But the collapse of the industry's two biggest players - Great Southern and Timbercorp - has spooked investors and advisers, with analysts expecting less than a third of the $1.2 billion raised last year would be likely to be raised this year.It's understood that PIS is the industry's single biggest adviser, with one analyst estimating the group accounted for up to $200 million in MIS sales each year as it swallowed commissions of up to 10 per cent.