The FPA has not commenced any new investigations into financial planning firms sharing a similar business model held by collapsed advice firm Storm Financial (Storm).
“I have to say that I have heard a couple of financial planners say this is widespread, though we have had no evidence to suggest this is the case,” FPA chief executive Jo-Anne Bloch said.
Bloch said the Storm business model was heavily focused on gearing and leverage and that the FPA has not seen any similar circumstances.
“And that’s why I’ve said in the past this has unique characteristics,” she said. “If anyone wants to table other organisations who might be in this space we’re all ears.”
“But we have not come across any other principal members of the FPA who have adopted such a similar business model per se.”
The FPA announced on Friday it had terminated the principal membership of Storm. The firm’s membership was officially cancelled on 12 January 2009.
“The FPA is absolutely committed to fully investigating all aspects relating to Storm and we will not tolerate any breaches of the association’s code of ethics or rules of professional conduct,” Bloch said.
“We want to make it very clear that we launched two investigations, one initially into Storm as a principal member and then separate individual investigations,” she said.
“We took the principal investigation to the situation where we actually laid charges against Storm, but unfortunately with Storm entering voluntary administration we were obliged under our constitution to terminate their membership, which means that investigation falls away.”
The FPA’s investigation into Storm continues, with the association in the inquiry and investigation phase.
