Creditors who lost money from failed investments attributed to Westpoint are preparing to launch a class action against the financial planners who helped sell them the products for fear that Westpoint will be too broke to repay them.
Law firm Slater and Gordon, who is preparing the possible class action on behalf of creditors, confirmed planners were currently in their sights.
“I think [planners will be targeted] as a matter of practicality as I suspect there isn’t going to be any money left in Westpoint,” said Slater and Gordon consultant Joanne Rees, who is working on the case.
Rees said the law firm could not confirm “at the moment” which planners would be sued, but added any action would take place soon.
“We’re planning to move pretty quickly, I think in a week’s time we’ll have some more information,” she said.
The Financial Planning Association (FPA), meanwhile, has said that the ultimate responsibility for any money lost through products associated with Westpoint lies with investors, not financial planners.
“All financial advisers have a duty to know their client and make appropriate advice, which investors accept when they sign off on the recommendation.”
“Advisers give the options but clients make the choices. If a [client] is not confident they can always get a second opinion.”
The FPA gave a similar response off-camera to Channel Ten regarding Westpoint last night.
News of the preparation of the class action comes just days after Westpoint released a statement criticising planners for preferring to place money into the unregulated products offered by the company because they attracted higher commissions.
The FPA said it was not aware which particular planners might be involved in the Westpoint case.
“We don’t even now for sure if they were financial planners, they could have been mezzanine finance brokers, they could have been mortgage brokers,” said the spokesperson.
The Australian Securities and Investments Commission confirmed it is investigating planners associated with schemes offered by Westpoint.
