Australian (ASX) Stock Market Forum

Storm Financial Group

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Kez180 said:
I think storm's marketing centered around making people scared of things like inflation, becoming a burden on others and of missing the gravy train...

Once they were scared, storm could step in and 'save' them...
Click to expand...

The risk from doing nothing was greater than the risk from doing something...
 
Kez180 said:
I think storm's marketing centered around making people scared of things like inflation, becoming a burden on others and of missing the gravy train...

Once they were scared, storm could step in and 'save' them...
Click to expand...
You're very likely right. Nothing as motivating as fear.
 
Everyone has their story for joining Storm. Ours was simple. True we had paid off our home, both supers accumulating, and the bank account growing.

And this was the problem. We were advised by many not to let our money just sit in the bank earning low interest. "Get it to really work for you". Advisers on TV (money talk shows) were telling us to put our spare cash into indexed funds for our retirement. The government was telling a similar story so as not to have so many dependent pensioners.

So we thought, 'Yes this makes sense to us". But where to start as we knew nothing about investing. So we sought the advice of a couple of what we thought were reputable advisers, Cassimatis Securities Pty Ltd (later Storm) being one of them.....and in the final washing Cassimatis Securities Pty Ltd seemed the one...especially since our trusted friend and acquaintance with our MLC super fund that was doing very well, as well as our accountant though all sounded good and above board. And it actually was back in 1997.

We believe the wheels of conservative investing fell off three odd years ago when they developed their own funds, and their priorities changed considerably.....and that is the sad story we are now in.....our story of why we joined Storm.
 
gee anastasia your story sounds very familiar-i wonder why! yep it was all about trust-something we are finding a bit hard to do again- how do you know who to trust?? i rememnber those comm bank school banking passbook years ago-those comm bank tin money boxes that you would put your one,two and five cents in and take to the bank and get emptied- gee it seems like they try to get you very very early to trust the banks-that is why i cant beleive what has happened now- you think you are doing the right thing in dealing with big banks and a financial mob that has been around for ages-then look what happens the whole thing turns to crap-i hope that people who read this take a bitof a lesson about the banks-friends and family are not happy with what has happened and beleive me they are now very carefull which banks they will now do business with. maybe we should bring back the community type building societies-what do you think?? and there is still not a peep from mr c- i'd really love to hear from him-i would like to speak to him directly . does anybody know his number or his email ? big max can you help?
 
Julia said:
Excellent summary, Iggy Pop.

Monario, the tiny amount involved in that very small interest rate rise just on the interest owing by Storm clients, wouldn't even register on CBA's bottom line! To suggest the rise had anything to do with Storm is simply ridiculous.
CBA have already stated that they will not be 'materially affected' by the entirety of the Storm debacle.

QUOTE]


Just wanted to update you guys on what I know!!!

maybe I was been a little over the top stating that the rise had anything to do with Storm... BUT...


CBA have admitted that there exposure to storm is in the vicinity of 500MILL
(500,000,000), I reckon that would register on anyones bottom line.. I personally know of an out of court settlement between a client and CBA worth well over 250K (yet under 500K)..... I reckon they are feeling it, and perhaps to say that it was storm related was naive, but to say its not may also be!!!!

If that is an out of court settlement, i would hate to see what a court settlement would be!!!!! and times that by 1200-1500.. Hundreds of millions!!!
Click to expand...
 
Monario said:
Just wanted to update you guys on what I know!!!

maybe I was been a little over the top stating that the rise had anything to do with Storm... BUT...


CBA have admitted that there exposure to storm is in the vicinity of 500MILL
(500,000,000), I reckon that would register on anyones bottom line.. I personally know of an out of court settlement between a client and CBA worth well over 250K (yet under 500K)..... I reckon they are feeling it, and perhaps to say that it was storm related was naive, but to say its not may also be!!!!

If that is an out of court settlement, i would hate to see what a court settlement would be!!!!! and times that by 1200-1500.. Hundreds of millions!!!
Click to expand...

That is good to hear but bear in mind that the cost to the CBA is a one-off hit. From what I have read and understand, CBA is reviewing the loans only not the investment losses so, assuming that is correct, Storm clients have still lost heaps of money such as fees paid to to Storm and their investment funds.

Nevertheless, any settlement may assist Storm clients in some way to getting back on their feet which is good.
 
Anastasia said:
Everyone has their story for joining Storm. Ours was simple. True we had paid off our home, both supers accumulating, and the bank account growing.

And this was the problem. We were advised by many not to let our money just sit in the bank earning low interest. "Get it to really work for you". Advisers on TV (money talk shows) were telling us to put our spare cash into indexed funds for our retirement. The government was telling a similar story so as not to have so many dependent pensioners.

So we thought, 'Yes this makes sense to us". But where to start as we knew nothing about investing. So we sought the advice of a couple of what we thought were reputable advisers, Cassimatis Securities Pty Ltd (later Storm) being one of them.....and in the final washing Cassimatis Securities Pty Ltd seemed the one...especially since our trusted friend and acquaintance with our MLC super fund that was doing very well, as well as our accountant though all sounded good and above board. And it actually was back in 1997.

We believe the wheels of conservative investing fell off three odd years ago when they developed their own funds, and their priorities changed considerably.....and that is the sad story we are now in.....our story of why we joined Storm.
Click to expand...

From what you say it sounds like the managers of Storm got caught up in the bull run like everyone else.

This will probably sound harsh, but I'm surprised that Storm is the only financial planning company to succumb to this end, considering the gravity of the GFC and compared to 1929.

Are there any other financial planning firms or financial planners that have ended up this way?
 
From the foregoing I take it that greed had nothing to do with comfortable people, hocking themselves up to the eyeballs in debt, with a spinmeister par excellence like Manny Cassimatis.

They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.

If this be true the community has a duty to rescue them from foolishness in the future.

Wayne Swan says there is no need to investigate the banks.

The banks will give them as little as possible and only where loans are proven to be defective as a result of proven incompetence.

SICAG have put certain submissions into the coming Inquiry but my bet is that nothing will come from them.

Manny will set up again.

Perhaps in funeral insurance which seems to be the de rigeur "investment" of the day at present on TV ads.

Life can be a bit of a joke at times.

And life repeats.

gg
 
Garpal Gumnut said:
They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.
Click to expand...
Altruistic? You must be joking! Many of these people were already far beyond access to government pensions in terms of their existing wealth, and even for those who were not, I rather doubt that saving their fellow taxpayers was uppermost in their minds.



If this be true the community has a duty to rescue them from foolishness in the future.
Click to expand...
No, the community does not. It's time people took responsibility for their own outcomes.



Wayne Swan says there is no need to investigate the banks.

The banks will give them as little as possible and only where loans are proven to be defective as a result of proven incompetence.
Click to expand...
And in so doing, they are looking after their shareholders.
 
Julia said:
Altruistic? You must be joking! Many of these people were already far beyond access to government pensions in terms of their existing wealth, and even for those who were not, I rather doubt that saving their fellow taxpayers was uppermost in their minds.
Click to expand...

I believe some were only looking at "drawing down" not much more than what the government pension was paying. One comment I heard was that they were proud not to be a burden on the taxpayer for their future.

No, the community does not. It's time people took responsibility for their own outcomes.
Click to expand...

There maybe some benefit in support, it may be cheaper and more effective in the long term. After all we do support others who unwillingly have inflicted self harm.


And in so doing, they are looking after their shareholders.
Click to expand...

From what I've seen I'm wondering why the banks approved these loans in the first place. I'm not sure if the shareholders interests where foremost in the first instance. Surely the modeling would have raised red flags I read in a article where "pensioners" were allegedly "earning" over $100K per annum.

And as for gg comments about EC's abilities in the sales arena, I believe that his past performance speaks for its self.

I've had a long talk tonight with a Stormer, they are not doing to well at the moment. It's hard to hear the anguish and pain in their voice knowing that they may soon lose almost everything they worked for all their life. I have been wondering lately, why in a great land as this, something like this could happen.....
 
"BoQ branch performance startles"

"Confidential documents reveal a Bank of Queensland branch at the centre of the controversy around Storm Financial was lending more than $20 million a month at the height of the collapsed advisers' popularity."

Read more on page 48 in today's Australian Financial Review by Duncan Hughes.
 
"Compensation talks for Storm"

"KEY POINTS: One investigation is focusing on a possible systemic overstatement of borrower incomes and borrower collateral asset values. Negotiations are continuing. Investors in the collapsed Townsville-based financial adviser Storm Financial meet today with Commonwealth Bank of Australia officials to discuss compensation amid speculation the bill could range from a few hundred million to $1 billion."

Read more on page 44 in the Australian Financial Review of 13/7 by Duncan Hughes.
 
Garpal Gumnut said:
From the foregoing I take it that greed had nothing to do with comfortable people, hocking themselves up to the eyeballs in debt, with a spinmeister par excellence like Manny Cassimatis.

They sacheted into a morass of double debt, abetted by the banks in an altruistic attempt to save the state from having to pay them pensions.

If this be true the community has a duty to rescue them from foolishness in the future.

Wayne Swan says there is no need to investigate the banks.

The banks will give them as little as possible and only where loans are proven to be defective as a result of proven incompetence.

SICAG have put certain submissions into the coming Inquiry but my bet is that nothing will come from them.

Manny will set up again.

Perhaps in funeral insurance which seems to be the de rigeur "investment" of the day at present on TV ads.

Life can be a bit of a joke at times.

And life repeats.

gg
Click to expand...

GG,

You've been around long enough to know that:

  1. when it comes to finances, most of the population - and by that I mean around 70% - are inept. Just ask someone the formula for calculating compound interest.
  2. when money is lost, again most of the population do not hold themselves accountable for that loss. It always has to be somebody else at fault.
  3. the fear of losing out is a big factor. Look how many were peering over the back fences of friends, neighbours and family to see "how well they were doing" in comparison.
  4. regret of past decisions can have a big influence on people. Paid off house for 20 years, on age pension, want to get off age pension. So what did you do with the money you previously used to pay the mortgage? Invest it or spend it?
  5. are very naive in some matters. Notice how many expected the lenders of the funds to provide some form of financial advice, yet it was Storm advisers who were paid to provide advice not the banks.

I won't go on as it is too depressing except to say that as a result of the above, aka the few, the numerically very few, legislation will probably be introduced to make it more difficult and time consuming to obtain a margin loan (Like I really want to banks to go into detail of my finances - NOT.)

So what will probably happen? Forget margin loan with its in-built safety features, go for a home line of credit and hope to pay it off before your retirement date as required under most mortgage agreements. Won't that be fun.
 
Judd said:
GG,

You've been around long enough to know that:

  1. when it comes to finances, most of the population - and by that I mean around 70% - are inept. Just ask someone the formula for calculating compound interest.
  2. when money is lost, again most of the population do not hold themselves accountable for that loss. It always has to be somebody else at fault.
  3. the fear of losing out is a big factor. Look how many were peering over the back fences of friends, neighbours and family to see "how well they were doing" in comparison.
  4. regret of past decisions can have a big influence on people. Paid off house for 20 years, on age pension, want to get off age pension. So what did you do with the money you previously used to pay the mortgage? Invest it or spend it?
  5. are very naive in some matters. Notice how many expected the lenders of the funds to provide some form of financial advice, yet it was Storm advisers who were paid to provide advice not the banks.

I won't go on as it is too depressing except to say that as a result of the above, aka the few, the numerically very few, legislation will probably be introduced to make it more difficult and time consuming to obtain a margin loan (Like I really want to banks to go into detail of my finances - NOT.)

So what will probably happen? Forget margin loan with its in-built safety features, go for a home line of credit and hope to pay it off before your retirement date as required under most mortgage agreements. Won't that be fun.
Click to expand...


Judd, good sensible post, well said , good words of wisdom and yet blatently obvious and simple logic.... :)
 

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