Complaints against financial planners have surged in the wake of the Westpoint scandal, according to Alison Maynard, head of the Financial Industry Complaints Service (FICS).
Maynard said while FICS has so far received 15 written complaints regarding Westpoint since January this year there has also been an upturn in non-Westpoint related complaints against financial planners since the scandal first became public. The increase reverses the trend for 2005 which saw a drastic reduction in the number of investigated complaints against financial planners by FICS from 284 in the 2004 calendar year to 189 last year. “The trend last year was a reduced number of complaints overall but particularly against financial planners,” Maynard says. “I don’t think we will see that happen this year.” She said the reduction in complaints against financial advisers last year was probably due to better internal complaints procedures in planning firms and buoyant markets. “Complaints tend to reduce when clients are making money,” Maynard said. Westpoint appears to have undone all the good work the planning industry has put in to lift its reputation, however, Maynard said it was too early to tell if the increase in complaints was a long-term trend. As well as the 15 written Westpoint-related complaints FICS has also fielded 170 telephone enquiries from disgruntled Westpoint clients since February. Maynard said the complaints body expected many more written complaints to surface on the basis of the telephone enquiries. FICS members have 21 days to reply to complaints before the resolution process begins. The first financial planning member firm was notified of a complaint about Westpoint products on March 8 this year Maynard said FICS would endeavour to clear Westpoint cases as quickly as possible and has appointed a three-member team to deal with the crisis. Most FICS cases are resolved within 6-12 months but she said the intention is to deal with Westpoint complaints faster than normal. Last year the proportion of successful complaints against financial planning members of FICS also dropped slightly from 28 per cent in 2004 to 23 per cent in 2005.
There is one investment area where Insignia’s $180 billion super arm has not lost money for the past 17 years, which is what it calls the insurance-related investments. The alternatives strategy is gaining popularity among asset owners due to its diversification benefit, but Insignia’s super and asset management investment chief Dan Farmer warns it is a space where investors can suffer if they “stumble in without doing the homework”.
Darcy SongJanuary 23, 2025
