FPA acts on Westpoint complaints
The Financial Planning Association has confirmed that it is investigating six complaints about its members in relation to the failed Westpoint group.
The FPA would not disclose which members, or how many, were involved in the investigations process.
Although the FPA had described the 10 to 13 per cent commissions allegedly received from Westpoint by some financial planners as seeming “unreasonably high”, it is maintaining that commission-based selling of financial advice is acceptable, as long as it is clearly disclosed.
“Commissions of around 10 per cent seem unreasonably high in respect to the investments that have been recommended to the clients. The FPA doesn’t have any specific requirement about the level of commission which is payable to advisers,” FPA chair Corinna Dieters told the ABC last Thursday night.
Up to 100 financial planners are expected to by sued over Westpoint by close to 2,000 investors in a case being prepared by lawyers Slater and Gordon and bankrolled by IMF.
The Australian Securities and Investments Commission (ASIC) is also investigating financial planners who recommended Westpoint products.
ASIC chair Jeffrey Lucy said around 50 parties, both individuals and organisations, were currently being investigated by the regulator. At a recent Senate estimates committee he named Westpoint’s financial planning arm, the Keble Group, as one of these organisations.
Lucy also confirmed research houses that recommended Westpoint products, including independent research house Property Investment Research, were also coming in for close scrutiny.
ASIC, meanwhile, has sent out a press release defending allegations that it was too slow to warn consumers about two Westpoint related investments.
ASIC said that in June 2004 it wrote to all investors who held promissory notes issued by Emu Brewery Mezzanine Limited and Bayshore Mezzanine Pty Ltd alerting them to proceedings commenced in the Supreme Court of Western Australia.
“Concerns have been raised that ASIC did not alert investors to the allegations raised by ASIC in these proceedings. This is simply not true. As well, these concerns were well known to the Westpoint group and its advisers,” Lucy said.
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