The Questus group in Western Australia is understood to be considering legal action after it was revealed last week the state chapter of the Financial Planning Association (FPA) warned its members against investing in one of its schemes.

David Somerville, Questus chair, told Investment & Technology News, that there are “a number of things occurring” as a result of the West Australian FPA state chapter warning and an article that appeared in The West Australian newspaper last week. “I can’t disclose anything at the moment but we are very concerned with how the story was handled,” Somerville said. The state chapter of the FPA sent out a note to its members after the WA Planning Commission issued a warning about certain rural property investments in the Mandurah and Peel regions on offer that were based on unsubstantiated hopes of urban development. In response to the WA Planning Commission warning Julie Matheson, head of the Perth FPA chapter, wrote to its members on February 27 about TV ads promoting “the speculation of urban sprawl in the region and the financial gains to be made”. At the time only Questus was advertising such offers on TV. Matheson reminded FPA members to conduct appropriate research before recommending speculative land investment products to clients. “With WA experiencing the riches of a mining boom, it is up to financial planners to guide the transfer of wealth for our clients into proven investments with a track record. Leave the speculation until after the boom has passed,” she wrote. Somerville said Questus withdrew its PDS, an open-ended investment product which included four property development projects one of which was located in Mandurah/Peel, after the initial WA Planning Commission warning. “We plan to issue a supplementary prospectus in about 4-6 weeks and we will reconsidering the fund’s structure in light of the political treatment it has received,” Somerville said. He said the failure of Westpoint has cast a lot of doubt on the property investment sector making it difficult to promote products. “The timing couldn’t have been worse as a result of Westpoint,” Somerville said. He said Questus has no association with Westpoint. A spokesperson for the FPA said the organisation has not targeted Questus in particular. “We do not seek to make judgements on particular investment opportunities or financial products but we do consider it is our role to pass to members bona fide information, especially that received from government or regulatory authorities, so that they are alerted and are able to make their own decisions and judgments about how to appropriately guide consumers in their investments,” the spokesperson said. As well as its property development arm the broader Questus group includes a financial planning business; a capital raising company; a pooled development fund, and; it owns a 50 per cent share in the WA state franchises of real estate firm Raine and Horne.

Join the discussion