Fincorp in receivership...

[theasxgorilla]

http://www.news.com.au/perthnow/story/0,21598,21446785-948,00.html

Only 8000 investors, but they're $200 million AUD in the red...average age of investor 60 years, and by my calculations average investment $25k.

Repercussions? Consumer confidence to take a hit? Or is $25k AUD pocket change when you're 60?

 

[Garpal Gumnut]

http://www.news.com.au/perthnow/story/0,21598,21446785-948,00.html

Only 8000 investors, but they're $200 million AUD in the red...average age of investor 60 years, and by my calculations average investment $25k.

Repercussions? Consumer confidence to take a hit? Or is $25k AUD pocket change when you're 60?

Three tips on how to avoid this pitfall

1. Never follow advice from a Financial Planner
2. Never follow advice from a Financial Planner
3. Never follow advice from a Financial Planner

Garpal

 

[theasxgorilla]

Apparently part of the story goes that a while back ASIC took them to court and won, claiming that they were misrepresenting or failing to represent enough about how their product was structured. Post collapse, accusations are now being leved at ASIC for failing to give enough profile to the ruling, as part of it gave investors who had invested during the dubious marketing campaign permission to get a full refund.

I think these are the guys who used to advertise in the Fin Review, claiming 8-10% "secured" returns from a product that sounded like a term deposit on steriods.

 

[coyotte]

Similar setup to the Pyramid Building Society collapse --- when was that ?

Cheers

 

[Judd]

Similar setup to the Pyramid Building Society collapse --- when was that ?

Cheers

At the same time as Estate Mortgage and in the same State (vic) under the same Government (Labor).

At least Henry Bolte had the guts in the 60's when Cambridige Credit went to the wall to say, in a figurative sense, "Stuff 'em. They took the risk, they can wear it." when the losers asked for compensation from State coffers.

And now I suppose we will probably hear the cry of "The Government shoulda done something to protect us from ours own cupidity."

Like others we have lost some dollars through not being careful and questioning enough but that is how you learn. Not through crying for someone else, that is other taxpayers, to bail you out.

 

[Halba]

Wow this really sux for holders. But the old adage "if its too good to be true, it usually is".

 

[YOUNG_TRADER]

Three tips on how to avoid this pitfall

1. Never follow advice from a Financial Planner
2. Never follow advice from a Financial Planner
3. Never follow advice from a Financial Planner

Garpal

lol too true

 

[greggy]

The greater the return, the greater the risk.

 

[Halba]

lol @ greggy

3% extra return vs cash, but risk total loss of capital? Boy do these people know risk/reward? :bonk: :bonk: :bonk:

Thats right its not poor people. those people who invested in this probably were fools.

To risk my entire capital base i would need a very high return, something well over 100% "the double or nothing" rule

 

[greggy]

lol @ greggy

3% extra return vs cash, but risk total loss of capital? Boy do these people know risk/reward? :bonk: :bonk: :bonk:

Reminds me of the Pyramid Bld Society days when the returns were considerably higher. But the problem was compounded with arguably Victoria's worst ever Treasurer in Mr Jolly coming out in support of Pyramid at that time only to see it collapse within a month or so. They were dark days for Geelong and the rest of Victoria for that matter.

 

[BSD]

Three tips on how to avoid this pitfall

1. Never follow advice from a Financial Planner
2. Never follow advice from a Financial Planner
3. Never follow advice from a Financial Planner

Garpal

BS

I think you will find the majority of the mugs in this one got in through ads in the paper and on the radio.

 

[The Red Baron]

I remember getting heaps of their ads in the mail every month a while back, somehow I must have found myself on their mailing list.

Offering like 8% for 6 months, 9% for 1 year, 10% for 3years.. I didn't understand the whole unsecured notes, risk factors and exactly how it all worked.

Ended up just going with the Bankwest Telenet 6.8%, the risk/reward wasn't worth it.

 

[laurie]

The Sun-Herald Financial Review Investor pull out has Fincorp from last Sunday together with 14 other similar offers and none that I even heard of! offering
1. 9.75%
2. 9.85%
3. 10% [nice name to fund]
ect,ect

cheers laurie