Westpoint-linked financial planning firm Brighton Hall Financial Services has been placed into liquidation after its professional indemnity insurer Allianz refused to renew its contract.
The Perth firm’s owner Clinton Reid sold the bulk of the business to rival firm Aequitas Financial Services for an undisclosed sum and placed it into voluntary administration.
Brighton Hall has been the target of Westpoint investors who say they received bad financial advice following the property group’s multi-million dollar collapse in 2005.
IFA’s 2007 dealer group survey showed that Brighton Hall held $50 million in funds under advice and employed eight planners.
Around four of the planners have gone to work for Aequitas, which is working out of Brighton Hall’s old offices in South Perth.
Liquidators Jack James, Brian McMaster and Russell Morgan from Korda Mentha were appointed on September 7 to wind up operations.
Reid and his wife Veronica bought the business from former owner John Whitehead on July 1 2003.
Whitehead was a director of four Westpoint mezzanine companies who ASIC banned for two years in January 2003. He was found to have mislead investors over his involvement in Westpoint through his former firm Winthrop Securities.
Around 60 to 70 retiree investors are understood to have been exposed to the Westpoint through Brighton Hall.
A number are seeking compensation through the Financial Industry Complaints Service (FICS).
Reid, who said he has stayed on as a consultant to assist in the transfer of clients, said the majority of the clients who invested in Westpoint with Brighton Hall had done so before he bought the business from Whitehead.
“It certainly cost me significant capital,” he said.
Reid said he is working with ASIC and FICS and there has been no conclusive evidence of inappropriate financial advice.
“I have nothing to hide,” he said. “It failed because we were not able to renew PI.”
