Settlement in Westpoint action
Newcastle-headquartered Prosperity Advisers has become the first financial planning practice to reach an out of court general agreement with its clients implicated in the Westpoint collapse.
The settlement has been concluded with the bulk of an unnamed number of clients who were involved in a class action against Prosperity through law firm Slater and Gordon.
A small percentage of the clients involved in the class action are said to have rejected the offer of settlement and are pursuing claims through the Financial Industry Complaints Service (FICS).
The independently owned practice, which employs about 150 people out of its Newcastle, Sydney and Brisbane offices, has more than $500 million in funds under advice (FUA).
Chief executive Allan McKeown confirmed the confidential offer had been accepted by 98 per cent of affected clients, and that the class action against Prosperity would not proceed.
“We believe this settlement is the best outcome for all stakeholders, allowing our clients and Prosperity to put the matter behind us and move on,” he told Money Management.
“In particular, we are pleased to have devised an outcome for our clients that will enable some recovery on their investment while the regulators continue to untangle the Westpoint group and pursue its directors.”
He said he was also “pleased the settlement proposal, on which we worked directly with our clients from the outset [of the Westpoint collapse] was resoundingly endorsed by 98 per cent of affected clients.
“As far as we are aware, Prosperity is the only planning firm in Australia to have reached and concluded such a settlement with its (Westpoint) clients.”
McKeown later refused to confirm a settlement figure put to the firm by Money Management on the basis that the settlement was confidential.
“Prosperity is bound by the confidentiality agreements that are in place, so we are unable to spell out the facts (of the settlement) to you,” he said through a spokesperson.
Meanwhile, FICS chief executive Alison Maynard has confirmed Prosperity is the first financial planning practice to have made a general offer of settlement to Westpoint clients.
“It is not the only one to have settled with clients, but to my knowledge the others have been with individual clients rather than a general offer of settlement to all clients.”
Maynard added she’s anticipating the first of the Westpoint complaints currently before the FICS arbitration panel to be resolved “within the next two months”.
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