Reference to a positive research report will not be enough to get planners off the hook for recommending Westpoint products, Jeffrey Lucy, ASIC director told the Senate earlier this month.
In response to a question from Nick Sherry, Labor spokesperson for financial services, Lucy said advisers who relied on a report from research house Property Investment Research (PIR), which rated Westpoint three out of five stars, would not be able to use that as a defence. “…I think the point you are raising is: will it be acceptable for these people to use that excuse if they simply relied on that information?” Lucy said. “That certainly will not be, in the first instance, acceptable to ASIC. We will want to go behind it as to the validity of that research and what other inquiries people should make.” He said ASIC would be paying particular attention to the use of the word ‘secured’ by advisers who were selling Westpoint products, claiming there had been “ quite a level of mischief” in its use in this case. Sherry also asked ASIC to clarify whether other research houses had refused to rate Westpoint because they had concerns about their products. “However, in this case Westpoint were able to secure the services of this independent research house. Again, my information is that it was for a sum of money substantially above what would normally be expected,” Sherry said. “The whole issue begs the question about the relationship between a supposedly independent research house and Westpoint in this case.” Lucy agreed with this statement and said: “We are right in the middle of an investigation, and those issues will be part of our investigation.” Sherry also requested that ASIC investigate the activities of The Private Collection, a third-party distributor, in relation to Westpoint. The Private Collection, headed by former Assirt executive Krystyna Weston, acted as a third-party distributor for Westpoint, however, it is understood the relationship ended early last year.
Since taking over the top job at the $44 billion Funds SA more than a year ago, chief executive John Piteo has ushered in an investment function overhaul and wrapped up an important stage of the fund’s five-year data transformation program. It pledges to recentre around investment performance and more efficient processes, as the “missing piece” has been found in incoming CIO Con Michalakis.
Darcy SongJanuary 10, 2025
