Industry bodies team up on Westpoint investigation

The Financial Planning Association (FPA) is currently working in conjunction with financial regulatory and complaints bodies to determine how the Westpoint failure will affect its members.

FPA general manager of professional standards Adrian Lucchese said the investigation was a collaborative effort between the FPA, the Financial Industry Complaints Service (FICS) and the Australian Securities and Investments Commission (ASIC).

Lucchese said most of the complaints the association had received regarding Westpoint involved advice issued by unlicensed advisers, and that the FPA was approaching the situation with an open mind.

“What we are doing is not considering that just because Westpoint has been recommended that it has been bad advice,” he said.

“I’ve heard lots and lots of pain from both sides of the fence, from consumers as well as from financial planners. Our job at the moment is to gather the information from both the complainant and also the planner along with supporting materials from both parties before we take any further steps,” Lucchese explained.

FICS national relations manager Trevor Slater confirmed the complaints body was also assessing the Westpoint situation without any preconceived ideas.

“Each complaint will be treated on its merits … It may well be the case that a plan that’s got Westpoint in it is a fine plan and there’d be nothing to untoward in it,” Slater said.

He added the type of advice FICS would consider appropriate in regard to Westpoint was that given to an investor with a high risk tolerance suggesting a small allocation of funds into the failed company’s products.

However, Lucchese said action could be taken against planners who recommended Westpoint products on the grounds of bring the industry into disrepute.