Financial planners have sought legal advice over the role of the auditors of Westpoint in an attempt to recover client funds, as other dealer groups analyse their clients’ exposure to the developer.
“From our initial investigations, it appears there have been irregularities in the audit reports produced by KPMG, which have obviously influenced the outcome of financial planners’ decisions, as well as the structure of some of the internal arrangements,” Association of Independently Owned Financial Planners (AIOFP) chief executive Peter Johnston said.
His view was supported by Money Matters managing director and AIOFP member Ian Bristow.
“I think KPMG’s role in this has to be seriously looked at. If we can find problems with their audited accounts they will certainly be at the top of the list alongside Norm Carey and the other directors,” he said.
Bristow also called for the role of the Australian Securities and Investments Commission (ASIC) in proceedings to be examined closely.
“Given that Westpoint has been the subject of ASIC interest for a couple of years now . . . how is it that ASIC has allowed this situation to go on for that long before they have done something?” Bristow asked.
Meanwhile, several financial planning practices contacted by Money Management were still trying to determine the level of exposure they have to the failed investment schemes, amid threats of legal action being brought against them by investors.
A spokesperson for Bongiorno Financial Advisers said the Westpoint products were included on the group’s recommended list back in 2002-03, but had been removed in early 2004 when Westpoint indicated the possible transfer of funds into other developments, and flagged varying maturity dates.
At that time, the firm’s advisers were instructed to suggest their clients redeem their funds from these offerings.
Professional Investment Services also stated that it had Westpoint products on its recommended list, but said these products had been removed some time ago.
Platinum managing director Murray Hills said one adviser who had joined the firm in the last two months had clients with funds invested with Westpoint products, but because the relationships were with the adviser’s previous dealer, that group was assisting the clients.
Similarly, Wealthsure chief executive Darren Pawski said several new advisers had joined his organisation in the last 12 to 18 months, and the group was currently investigating whether any of its advisers’ clients had exposure to Westpoint’s products from their previous licences.
Deakin Financial Services chief executive Phil Butterworth declined to comment on whether Deakin clients had exposure to Westpoint products.
“We’re doing what we need to be doing to make sure if we do have an exposure, clients are looked after and advisers are doing the right thing, and so far we’re pretty comfortable with where we sit on that investigation,” he said.
In contrast, Securitor, AMP, MLC, Financial Services Partners, Australian Unity, and Bridges Financial Services stated that at no time were any Westpoint products on their respective recommended lists.
