1. Deakin/DKN
Deakin Financial Services went from a prosperous takeover machine to an empty shell of a group.
Perhaps it was its overeagerness to acquire new arms, or perhaps it was the revelation in 2003 that the dealer group had forecast a loss for the financial year ending June 30 of $1.2 million, but then raised its forecast to a $1.8 million loss; either way, the death knell began sounding.
In an attempt to salvage the group from financial ruin, Deakin went into buying mode and secured what would be one of its last acquisitions — Austchoice Financial Services. After the acquisition, Deakin Financial Services and Austchoice Financial Services merged to form DKN.
The merger would eventually spell the end for Deakin Financial Services because in early November this year DKN Financial Group appointed Ferrier Hodgson as administrators to manage the dealer group’s shut down.
2. Dazza/FPA
He might have been well-intentioned, but the Financial Planning Association’s (FPA) television campaign anti-hero Dazza ruffled a few too many feathers at the FPA itself.
Launched in October 2005 as part of a plan to boost financial planning among consumers, the ‘Don’t Ask Dazza!’ television ads were part of the association’s ‘Value of Advice’ campaign.
The campaign covered metropolitan and major regional centres, with the aim of promoting the value of professional advice and encouraging more Australians to seek financial advice.
While working quite well among consumers, the campaign was received less favourably by the FPA’s members, with many concerned Dazza might be mistaken for a financial planner.
3. ASIC/Westpoint
It’s been a tough year for the financial services regulator, the Australian Securities and Investments Commission (ASIC), with the big gun stumbling in its handling of the Westpoint collapse.
Earlier this year speculation mounted over whether ASIC should have acted sooner to inform investors about the risks associated with mezzanine financing.
In February this year, the regulator released a statement vehemently denying any wrongdoing on its part in informing investors about the failed Westpoint scheme.
ASIC chairman Jeffrey Lucy said a copy of ASIC’s allegations was also provided to each investor. The letter, which was written to investors in accordance with directions given to ASIC by the Supreme Court of Western Australia, was designed to ensure investors in those projects were informed about ASIC’s concerns.
4. Challenger Penrith Fund
Not every fund launch starts and ends with a good idea. Challenger’s Howard Property Trust — Penrith Homemaker Centre was such a fund.
In July this year, between 12 and 15 financial planning groups proceeded with a class action against Challenger FinancialServices Group over the collapse of its Challenger Howard Property Trust — Penrith Homemaker Centre. Since then, a group of 32 investors have launched a suit against the group.
The class actions followed a final payout to fund investors of 35 cents in the dollar. Challenger foreshadowed the payout in late April following the sale of the fund’s highly-geared sole asset, reportedly for 16 per cent below the original purchase price.
5. ASIC’s shadow shopper follow up
In an effort to continue its momentum to ensure a better financial services industry, ASIC dispatched letters to all of the 306 participants in its super switching shadow shopping exercise asking for additional feedback.
The letters were to “invite each and every one of them to make a formal complaint” about any aspect of the advice they had received as a shaddow shopper that they deemed unsatisfactory.
While it may have seemed like a good idea at the time the regulator did not receive even one additional complaint from the original shaddow shoppers.
