AUSTRALIA'S largest financial planning network, Professional Investment Services, has urged clients who invested almost $300 million in Great Southern schemes to avoid taking immediate legal action against the failed agribusiness provider.
AUSTRALIA'S largest financial planning network, Professional Investment Services, has urged clients who invested almost $300 million in Great Southern schemes to avoid taking immediate legal action against the failed agribusiness provider.
AUSTRALIA'S largest financial planning network, Professional Investment Services, has urged clients who invested almost $300 million in Great Southern schemes to avoid taking immediate legal action against the failed agribusiness provider.
PIS chairman Grahame Evans informed advisers late last week that clients might have received correspondence from lawyers regarding a potential class action.
"At this very early stage of the administration and receivership, we are urging PIS clients to be very cautious about joining any class action," Mr Evans wrote in an internal email obtained by WA Business News.
"There is no immediate necessity to make a decision, and it would be wise to await further developments in the administration and receivership."
PIS, which has 90 advisers in Western Australia and 1,400 nationwide, is defending a class action by clients who lost money in failed property group Westpoint. Law firms are also considering taking action against PIS after some of its advisers recommended clients invest in products run by the now defunct Timbercorp.
Mr Evans defended the presence of Great Southern and Timbercorp on the group's approved product list - a list of products an adviser can invest in - and said that commissions received for recommending the products were in keeping with industry standards.
"PIS are very comfortable with the process and basis for having included Timbercorp and Great Southern schemes on our APL," Mr Evans wrote.
Threats of legal action over the failure of Perth-based Great Southern have so far focused on the agribusiness company itself, although advisory firms and researchers are possible targets.
Hugh McLernon, the WA executive director of IMF, is preparing a case against Great Southern on behalf of investors who were given now-worthless shares in the company in exchange for valuable cattle assets.
"There are investors who need to move and they need to move quickly," Mr McLernon said.
It is understood there are several thousand Western Australians who invested in Great Southern.The company fell into administration last month with liabilities of almost $1 billion.
PIS clients have a collective $290 million exposure to Great Southern investments, out of $17 billion in total funds under advice.
Mr Evans told WA Business News he was comfortable PIS was not liable for losses in Great Southern, and that he simply wanted to warn clients against giving away rights by hastily joining a class action.
"It's a matter of don't jump into the first one you see. There's no time frame," Mr Evans said.
"The issue at the moment is that we don't know what the loss is."