Flaws in the compensation process for victims of poor investment advice received from former Commonwealth Financial Planning Limited (CFPL) authorised representative Don Nguyen coupled with an unsolicited offer of assistance in the matter from a separate party were the motivating factors behind the class action Maurice Blackburn has brought against the Commonwealth Bank-owned dealer group.
"We are concerned that the compensation regime set up by Commonwealth Financial Planning Limited and supervised by ASIC is not working and it's not to the extent it should and that those people who have suffered loss at the hands of Commonwealth Financial Planning should be compensated and should be compensated sensibly and we're afraid that's not happening," Maurice Blackburn managing principal Ben Slade said.
"We're also very concerned there's an organisation who is preying on the victims of this wrongful conduct by directly contacting them and offering to help them have their issue resolved and we think it's important to move quickly . to ensure that the Federal Court has supervision of the resolution of these claims."
The third party in question, Financial Resolutions Australia, has been sending out unsolicited letters to individuals who it says "fit a profile of persons that have used a financial planner . and has suffered a financial loss as a result of their financial advice" in the correspondence.
In regard to the compensation process CFPL is working through with ASIC, Slade said there was not enough objectivity and understanding of the financial planning process involved.
"It's not good enough for Commonwealth Financial Planning Limited to make their own assessment of what the position of the people should have been, to make their own assessment of what their losses are, and to claim they're getting some level of independent supervision through an accounting firm . which only checks numbers," he said.
Retired public servant and former Nguyen client Elizabeth Saunders is the lead applicant in the class action.
Maurice Blackburn to date remains unsure of how many parties will be included in the group members of the action. In time these people will be notified of the proceedings by CFPL under order of the court and given the choice to join the action or opt out of it.
