Australia's stockbroking industry needs to take a closer look at the ethics and standards of brokers if it is to stamp out conflicted advice for clients on an ongoing basis, according to the managing director of Wilson HTM Investment Group.
"It's about time that the stockbroking industry and association had a good look at itself and its standards," Andrew Coppin told InvestorDaily.
"The payment of sign-on bonuses and payment to advisers at the level that these people have been paid is ridiculous. I think it's near on impossible to give non-conflicted advice."
Coppin's comments come just days after a verdict was reached in Wilson's case against industry rival Ord Minnett over the payment of $5.4 million in sign-on bonuses to five former Wilson advisers.
"I think the stockbroking association should be looking into ethical conduct [of the industry] and the matter of remuneration and non-conflicted remuneration and I think the regulator should be looking at it as well," he said.
Commenting specifically on the Wilson case, he said the fact it reached court at all was a "sad outcome for the industry".
"I'm disappointed for the industry, but I'm hopeful that we can be better for it at a macro level," he said.
"There are firms out there that I have worked for previously, [such as] Bell Potter and Pattersons, that have policies against sign-ons for that very reason."
He said in all the places he had worked, particularly at a managerial level, he had not witnessed the payment of sign-on bonuses of "this nature".
Coppin acknowledged he had issued equity and marketing budgets to staff to assist them to grow their businesses.
On Monday, New South Wales Supreme Court Chief Justice Patricia Bergin ordered Ord Minnett to pay Wilson more than $170,000 in damages and costs.
As part of the ruling, Justice Bergin also declined to issue Wilson's injunction against Ord Minnett, which sought to restrain Ord Minnett from hiring more Wilson employees on the basis that it would "affect those individuals".
Coppin said the ruling stated that Ord Minnett could not use and "have a permanent injunction against the use of the confidential information", which meant it could not use the information the group currently had to approach Wilson staff.
In response to the court verdict, Ord Minnett chief executive Tim Gunning said: "We are pleased that the court has ruled that we are able to continue to approach Wilson HTM advisers who are trying to leave the firm.
"We are considering our legal options in regard of the damages award against us - we have consistently said the claims of inducement were without basis as there was evidence in court that the Wilson HTM advisers had approached several rival firms."
Asked whether he was concerned Bergin's verdict left the door open for Ord Minnett to approach the remaining 18 Wilson staff believed to be seeking to leave the group, Coppin said he was not.
"No, I think they [Ord Minnett] are pushing the limit of the ruling," he said.
"We don't believe there are another 18 will be leaving."
In terms of whether Wilson was planning further action against Ord Minnett, he said: "We're reviewing the civil penalties . we reserve our rights."
Meanwhile, the question Coppin said he believed should be asked would come from staff of groups like Ord Minnett, who would question why they were not receiving multi-million-dollar bonuses to stay with the firm.
Last month, Wilson commenced legal proceedings against Ord Minnett over the company's recruitment of five of its advisory and broking staff.
In July, Ord Minnett confirmed it had recruited five of the 11 Wilson advisers who publicly departed the firm.
Ord Minnett hired Joseph Pagliaro, Wren Bligh, Hamish Blanche, James Hunter and Angus Bligh, while six Wilson staff departed to join Macquarie Private Wealth.
The staff who quit for Macquarie Private Wealth were Peter Day, Carl Daffy, Jarrod Daffy, Richard Nettlefold, Brett Nichols and Ben Rickman.
