Money Managers claims that property syndicator Waltus released a copy of its client list to a competitor to help it fill its controversial KPMG Property Fund.
It says that Waltus gave Hamilton-based firm John Galvin Financial Planning a list of Money Managers clients who had previously invested with Waltus.
"Galvin phoned Money Managers clients recommending they invest in the KPMG Centre through him," Money Managers says.
Managing director Doug Somers-Edgar says he is appalled at such unethical practice.
He says Money Managers didn't promote the KPMG fund as it felt the product didn't stack up.
"The move has grave implications for the industry," he says. "Every adviser throughout New Zealand who has used Waltus in the past should be worried."
Since the client list was passed on Waltus has written directly to Money Managers clients about its next fund, Lakeside Properties Ltd.
Somers-Edgar says if an adviser who had used Waltus funds in the past decides not to promote a future one because they don't like it, then they can expect to see their client list passed on, or for the Waltus to directly contact their clients.
Waltus director Shayne Hodge describes the claims as "interesting", as Waltus hasn't dealt with Money Managers on a group basis since 1994, as it has its own Dominion Investment Trust property funds.
He says Waltus had contacted Money Managers clients as "they were no longer being served by the intermediary."
"These investors were not getting communications about Waltus products," he says.
The stoush raises the question of who owns the client; the adviser or the fund manager?
Hodge says no-one owns the client, and it's up to the investor to decide which is the best product.
Waltus respects the relationship between the adviser and the investor, he says, however in this case it was looking after people who had already invested with Waltus.
Somers-Edgar says this is an example of a fund manager selling directly to adviser's client base.
Money Managers claims that property syndicator Waltus released a copy of its client list to a competitor to help it fill its controversial KPMG Property Fund.