The number of Westpoint-related cases lodged with the Financial Industry Complaints Service (FICS) has hit 175 and is expected to reach 200 within a couple of weeks.

Alison Maynard, head of FICS, told Investment & Technology yesterday that up to 10 Westpoint complaints have been filed each week since the scandal broke and the pace does not appear to be slackening. Despite the complaints mounting at FICS, however, Maynard said that some consumers could forfeit their right to seek redress against their financial planners if they join the Westpoint Recovery Group (WRG). As reported in Investment & Technology two weeks ago, the planner-funded WRG, organised by advisory group buying collective – the Association of Independently Owned Financial Planners, joined forces with the Westpoint Investor Group (WIG) to launch legal action against the collapsed property business. Combined the two groups are alleged to represent the interests of 1,100 investors in Westpoint who collectively have lost $150 million. Consumers joining the WRG action are obliged to delay action against their financial planners until a decision in that case is handed down. Maynard said clients only have five and a half years left to file Westpoint complaints with FICS. “There hasn’t been any WRG action started yet and it could drag on in court for years, particularly if they decide to pursue KPMG,” she said. “I know that many clients may not wish to complain against their financial planners but they need to be fully informed of the risks of not doing so.” She said a case is already before FICS where a member is disputing the right of a client to seek recourse through the official complaints body because that client had joined the WRG action. “I’ve gone back to that member with a number of questions,” Maynard said. FICS is also facing another jurisdictional battle with a member who has claimed the body cannot rule over complaints involving promissory notes. Westpoint successfully used the promissory note argument to avoid regulation by ASIC but Maynard is confident FICS has jurisdiction in the matter. “Our view is that we can [rule over promissory notes],” she said. “We expect a [FICS] panel ruling on this shortly.” So far two Westpoint cases have been settled by FICS: in one case the client received the disputed payment in full from the planner/dealer; in the other the complainant was awarded an “agreed amount”, according to Maynard. Another Westpoint settlement is expected soon.

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