For some Westpoint investors their spirit is waning with a number close to giving up all hope of clawing back any part of their lost life savings.
For others, patience has turned to anger, with many uncompromising in lining up possible culprits to be held accountable.
Currently in the line of fire are corporate watchdog ASIC and financial planners.
Many have criticised the industry regulator for its lack of action in closing down Westpoint, its masterminds and product floggers.
Some view ASIC's November 2007 decision to seek millions in compensation from a number of Australian dealer groups on behalf of investors as being two years too late.
While others have just completely lost faith in ASIC altogether - for them the image of the regulator is now of fat cats sitting at the pointy end of the plane sipping champagne while on the way to a regulator briefing.
All confidence appears to be lost.
The financial planning profession has also been dealt a harsh blow in the aftermath of Westpoint.
Many planners embroiled in the collapse have or will face possible jail time or long-term bans. There have also been a number of rumoured suicide attempts by some advisers.
"Most of the planners I know and most of the planners I've met aren't worth a crumpet," Westpoint Investors Group president Graham MacAulay said.
"They're either the older ones who came from insurance salesmen or really they have no idea of how to handle something technically financial. But all the same, that doesn't mean that I'm against all planners.
"The real problem with all of that is even if you're the best planner in the world, with the state the markets are in, the lack of regulation that is involved, how can you make an informed decision on anything?
"The whole financial planning market at the moment is absolute bull. And it's not the fault of the planners. And it's strange in a lot of ways I'm not an enemy of the planner."
In short, the Westpoint collapse has had a detrimental effect on all concerned.
This then begs the question, where to now?
Westpoint - now
As of late last week, ASIC has filed actions against six licensees, an ASIC spokesperson told IFA.
These licensees are Bongiorno Financial Advisers, Dukes Financial Services, Strategic Joint Partners, Masu Financial Management, Professional Investment Services and State Trustees.
"ASIC's section 50 actions against six financial services licensees have now been filed and are before the court," the spokesperson says.
"In respect to two licensees that have gone into liquidation, ASIC continues to work closely with the liquidators of those licensees to ensure all available assets are made available to compensate clients. ASIC is also considering other potential recoveries where appropriate."
Ten licensed financial advisers and two unlicensed advisers who advised on Westpoint products have now been banned, the spokesperson says.
In terms of other avenues of compensation recovery ASIC may travel down, industry speculation suggests the regulator is close to taking action against insurance giant and former financial services professional indemnity (PI) insurance provider QBE Insurance.
"Quantum went into liquidation late last year and an application has been determined, and we're waiting for a ruling from the judge as to whether we're sought leave to be able to join the insurer as a defender to proceed against the insurer," IMF litigation manager Charlie Gollow says.
"So we're waiting on a determination on the court. It [the insurer] is QBE." There are also unconfirmed reports QBE may face similar action over PI claims associated with liquidated company Glenhurst Corporation.
As a result of Westpoint there have been a number of changes to the requirements of PI insurance under the Corporations Act, TressCox Lawyers senior associate Andrew Cheetham says.
"There have been some changes to the requirements under the Corporations Act for Australian financial service licensees to have appropriate compensation arrangements in place and the regulator has basically said that should be professional indemnity insurance," Cheetham says.
"So now everyone has to have it, it's made the insurance market quite a bit harder. QBE has pulled out of the market, and AIG [Australian Insurance Group] and one of two others who are yet to be APRA [Australian Prudential Regulation Authority] approved, I understand. But certainly the market is a lot harder for smaller licensees like suburban financial planners to get PI insurance if they have a claims history."
The new regulation of PI comes into effect on July 1, he says.
"Because you've had things like Westpoint and Bridgecorp, the changes have been made because retail clients were getting smashed and a lot of people have lost a lot of their superannuation funds," he says.
"People who have hit that retirement age have released a substantial component of their retirement savings or what they thought was their safe investments are no longer there."
In terms of dealer groups, PIS and Masu Financial Management are currently going through the litigation process.
"[Regarding PIS], at the moment there is a dispute about whether action can be run as a representative action or whether it must be a series of individual actions. A representative action is similar to a class action but it's not the same," Gollow says.
"We're having a dispute about that, and PIS got an order that it no longer continue as a representative action and the lawyers, who are Slater and Gordon, are appealing that decision. In relation to litigation, we're halfway through the proceedings with PIS.
"A similar approach was taken by Masu to have it broken down but they were unsuccessful with that and we're going through the proceedings, probably halfway through also at the moment."
In February 2006, Slater and Gordon announced it would pursue claims on behalf of about 2000 investors in the failed Westpoint mezzanine finance schemes.
"We're certainly of the view that there is a case to answer, but defendants will defend. In particular, it's not so much what I would refer to as the financial services licensee as it is their insurers," Slater and Gordon associate Ben Whitwell says.
"It's a case of them defending the proceedings as best they can. It's just the nature of an adversarial system."
As well as ASIC flexing its muscles in court, the regulator's crackdown on high-risk debentures has yielded a positive outcome for retail investors, with debenture issuers now disclosing more investment information, a new report by the corporate regulator has found.
ASIC released the third point of its action plan in the form of the Report 127 Debentures - Improving disclosure for retail investors.
ASIC chairman Tony D'Aloisio says the new guidance from ASIC has greatly improved the quality of disclosure to retail investors.
"Investors are now presented with improved information on the fundamentals of this type of investment. This information will assist them to make choices about their investment and better assess risks, particularly the risk of capital return," D'Aloisio says.
"ASIC takes the approach that Australia's retail investors, when given clear information such as the type now required of unlisted and unrated debentures, are capable of making sound decisions."
The FPA has also championed the cause of weeding out rogue advisers.
Earlier this year the FPA stepped up and publicly tabled the results of its disciplinary process.
In what FPA chief executive Jo-Anne Bloch called a big step for the association, the FPA announced it would release a quarterly report detailing any complaints and disciplinary action against its members.
The report revealed that from January 2007 to March 2008 the FPA had investigated complaints against 130 of its members for alleged breaches of its professional standards.
Of the 130 complaints, formal disciplinary action was taken in 13 cases. Fourteen of these members were investigated for involvement in Westpoint, while 116 were scrutinised over what the FPA labelled general complaints.
Six of the Westpoint investigations have since been closed, while a further six are ongoing. One member has been suspended while another has been expelled under FPA regulations.
Under the FPA's regulations the association is unable to release member names.
Bloch says the action taken in the 13 cases was either suspension or banning.
The collapse of Westpoint became public after the Financial Industry Complaints Service (FICS) began receiving complaints.
However, the complaints avenue hit a hurdle when ASIC announced last November that it intends to file lawsuits against five dealer groups and Westpoint directors to seek compensation for 3650 investors for the collapsed property lender.
If the regulator commences civil proceedings on behalf of an investor, a serious conflict could be created with the claims that are before FICS, financial services lawyer Mark Halsey says.
FICS rule 14 prohibits a complainant from continuing legal action while the external dispute resolution scheme is dealing with their complaint.
The complaints service has received about 400 written Westpoint complaints and about 550 phone enquiries.
The Westpoint Group promoted investments in a number of property development projects, including 10 projects using unsecured mezzanine finance.
The group created mezzanine companies for each of these projects and raised funds for the projects through the issue of mezzanine investment products such as promissory notes.
In May 2007, ASIC outlined a three-point plan for reforms to these types of investments to the Senate Standing Committee on Economics.
