Planners accept peer responsibility for Westpoint

Although financial planners think the Westpoint collapse can be blamed on a host of related parties, they are prepared to shoulder some of the responsibility.

A new online nationwide survey by brandmanagement found 72 per cent of the 586 planners surveyed said their colleagues should be held partly responsible for the developer’s demise. But according to respondents, it wasn’t all the planners’ fault. Only 31 per cent said Westpoint collapsed solely because of planners.

Not surprisingly, most finger pointing in the survey, 93 per cent, was directed at Westpoint’s senior executives.

The Australian Securities and Investments Commission, which came under fire from some investors and the Federal Opposition for not acting quickly enough to prevent the collapse, also came in for some heavy criticism, with 67 per cent of surveyed advisers saying it should shoulder some of the blame.

Investors didn’t get off either, with 56 per cent of respondents saying investors could be held partly responsible for their own misfortune.

But regardless of who is to blame for the biggest Australian corporate collapse since HIH Insurance, the vast majority of planners agreed that the debacle would be a bad thing for their profession. However, only 7.5 per cent said it would be a negative for their own business.

Surprisingly, close to a quarter of surveyed planners thought Westpoint would have a positive impact on their business.

Law firm Slater & Gordon is currently preparing a series of lawsuits on behalf of 2,000 investors against up to 100 planners that, reports suggested, put money into Westpoint products in return for excessively high commissions of upwards of 10 per cent.

Asked whether they thought planners who accepted excessive commissions should be penalised by the corporate regulator — whether they disclosed them properly or not — 48 per cent of respondents said they should, while 46 per cent said they should not.

Commenting on the results of the survey, Count Financial managing director Barry Lambert said he thought Westpoint would have a negative effect on all financial planners.

“I don’t think it could be a positive for too many individual businesses because it’s damaging for the reputation of a planner full stop,” he said.

“And that’s why we called ourselves wealth accountants, because this kind of thing is going to just keep on happening.

“You’ve just got to have one of the agribusiness business groups give a lousy return and that’ll be in the newspaper and they’ll discover that people are getting 10-15 per cent.

“So there’s more disasters on the way.”