Storm Financial Group

[Prime]

I was working for a risk planning firm for a short while who often had Storm SOAs pass our desks (or at the very least a personal balance sheet) - we'd regularly read in amazement at how the "planning" was almost identical for every client they passed us - equity lend to the hit then leverage over the borrowing via margin loans.

Agreed.

I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ...

The only thing that would be massaged in the SOA's would be the numbers and names if the individuals.

Be under no illusion ... THIS IS COMMON PRACTICE THROUGHOUT THE ENTIRE FINANCIAL PLANNING INDUSTRY!

 

[Steve Borden]

Agreed.

I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ...

The only thing that would be massaged in the SOA's would be the numbers and names if the individuals.

Be under no illusion ... THIS IS COMMON PRACTICE THROUGHOUT THE ENTIRE FINANCIAL PLANNING INDUSTRY!

That is true but unlike Storm a 28 year old does not get the same strategy as an 82 year old, with the only pre-determinate being the amount of equity in their property.

 

[Prime]

That is true but unlike Storm a 28 year old does not get the same strategy as an 82 year old, with the only pre-determinate being the amount of equity in their property.

Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.

Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate. Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.

 

[darkside]

Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.

Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate. Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.

WTF , the majority of submissions we have read, that Solly has kindly linked for us, are from elderly retired or close to retirement age people, I bet they sleep well at night knowing they had those extra safety parameters in place.

 

[DocK]

I accept the challenge. Who are they and or where do I get the names? Of course I would need to make sure that in so publishing their names that I am not leaving myself open to defamation suites.

Another undercurrent that you're implying here, is that all recipients of those funds did so with sinister intent. Have you got any real information?

Of course I don't know who they all are! That's my point. And I've not implied recipients took funds with sinister intent - I've no doubt their intent was to save their homes, and I'm sure almost every ex-storm client would gratefully accept an unsecured loan were it offered - but it hasn't been offered to all, just a chosen few... And those few would naturally be unlikely to now publicly blame Manny & Julie for their situation. I'm sure if Worrell's are able to follow the money trail they'll come up with the information eventually - whether those funds will have to be paid back is another matter entirely I guess. The CBA would no doubt want to lay claim to them given the amount Storm owed them at the time.

I do get the fact that SICAG have been around for over 6 months now and you're judging SICAG over the whole of that time based on one observation by its leadship in recent times. To be fair, I don't think it would matter what the excuse, you'd find something else to complain about. It goes to prove you cant keep everyone happy.

If you read my older posts you'll see that I'm not judging SICAG based on recent developments, I've been aware of and following their website from inception, being an ex-storm client myself. As I've stated in the past, they've done a power of good in the morale-boosting arena, and have been successful in promoting their point of view - ie banks to blame for everything - but I've never felt the view "portrayed" by SICAG is one I wished to subscribe to. No, you can't keep everyone happy, and I didn't want to be used to ensure the happiness of people who may not necessarily want the same outcomes I do.

You are also asking the SICAG leadership to make a judgement call about the ethicacy or other of the advice. How can you expect that when the membership are themselves polarised on the issue? We represent ALL members and it is not in anyones interest to label the advice good bad or indifferent.

Also quite frankly, none of us are qualified to cast such judgement on the quality of advice. Even ASIC gave Storm a clean bill of health just months earlier and you would have to think that they were better qualified than any other to pass that judgement.

Not asking SICAG leadership to make a judgement call - just wondering why there is nothing on the site that allows for the fact that the advice might have been questionable. There are numerous links to media articles - all about the banks, and none about the model or directors. There is an open letter to the banks, how about an open letter to Manny? At the very least if the site is not going to address the issue of the advice given, it should also refrain from actively warning its members away from "fee-for-service" advisors, simply because storm did things differently, therefore any other way must be incorrect????

You are obviously an avid SICAG supporter, and I am obviously quite cynical about its leadership's motives, so I doubt we're likely to agree. Perhaps we should call it quits and let future events unfold as they will. I'm sure most, if not all, will be revealed with time (and forensic accounting/court appearances).

 

[Ironhalo]

Actually, I think people would be shocked to find that most of the strategies are very similar with the major difference being the number and type of investments and the differnces in margin lending levels.

Your point it correct though ... the "one size fits all" plan was not (in hindsight) appropriate. Having said that, Storms say they maintained additional safety parameters for retirees in comparison to "normal" investors.

Wow. So you mean to tell me that despite me paying the same fees, the retirees that got wiped out regardless had better 'safety parameters'? Jesus wept.

See what I mean about people's perception of SICAG? Can you undersatnd why some people what no part of it when this kind of thing is actually believed by the people on the committee?

EC and his employees knew the parameters....and blatantly ignored them. Both anecdotally and evidentally.

 

[Prime]

Of course I don't know who they all are!

Well, when you do find out let me know and I'll get it put up on the web-site.

... but I've never felt the view "portrayed" by SICAG is one I wished to subscribe to. No, you can't keep everyone happy, and I didn't want to be used to ensure the happiness of people who may not necessarily want the same outcomes I do.

I have to admit that you are an enathema to me. On one hand you recon SICAG are doing a good job but for the fact that they cant and wont make a call about something they cannot hope to judge with any real cred.

At the end of the day though .... will you benefit from SICAGs efforts ... probably yes.

Not asking SICAG leadership to make a judgement call - just wondering why there is nothing on the site that allows for the fact that the advice might have been questionable. There are numerous links to media articles - all about the banks, and none about the model or directors.

You clearly dont "get" the fact that to publish anything that (to use your words above) "might have been questionable" is in fact making a judgement call and would further polarise the membership.

Again, the model was scrutinised by ASIC and given a clean bill of health, the directors will have to face their peers in the approriate legal forums, not here and certainly not on the SICAG web-site unless we have undisputable facts to present.

There is an open letter to the banks, how about an open letter to Manny?

I'll talk to the commitee about producing an open letter to EC ... I guess now that the JPC submissions are behind us we will have a bit of time to devote to such a document.

At the very least if the site is not going to address the issue of the advice given, it should also refrain from actively warning its members away from "fee-for-service" advisors, simply because storm did things differently, therefore any other way must be incorrect????

You actually have interpreted that warning incorrectly. That warning was placed on the web-site to achieve two parallell purposes.
1. To warn vulnerable ex-Storm victims that "some" less that honourable advisers were taking advantage of shell shocked people and charging them heaps for nothing of substance.
2. To advise other advisory firms that we would not promote other financial planning firms on our web-site for fear that they would similarly take advantage of the shell schocked membership.

I cant tell you how many approaches we rejected for these so-called "offers of assistance". You only had to google "Storm Financial" and there were numerous sponsored links addressed to "ex-Storm Clients".

SICAG does not apologise for adopting this type of motherhood behaviour in fact I think they should be commended for it.

You are obviously an avid SICAG supporter, and I am obviously quite cynical about its leadership's motives, so I doubt we're likely to agree. Perhaps we should call it quits and let future events unfold as they will. I'm sure most, if not all, will be revealed with time (and forensic accounting/court appearances).

I agree. History will judge SICAG and every other player in this debacle for their behaviour.

I trust that neither of us will be to proud to admit the other was right when the dust is fully settled.

 

[Solly]

Another nineteen submissions of interest to the

Inquiry into Financial Products and Services in Australia;

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub176.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub194.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub209.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub219.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub220.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub223.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub224.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub228.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub229.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub237.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub238.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub239.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub240.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub241.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub242.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub243.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub244.pdf

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub245.pdf

 

[Monario]

Prime, it could be said that SICAG hasn't exactly looked too hard for any wrongdoing on Storm's behalf, the website is a clear example of that.

Why don't we ask all the ex-employees who were told not to sell their clients out in Oct 08 and save them from financial devastation? I have heard it anecdotally from a number of sources now (and Ron Jelich has alluded to it in his parliament submission) that ex-Storm principals and staff knew that what they were doing wasn't in the best interests of their clients, and yet no one did anything about it.

We are happy to see SICAG take it to the banks, but answer us this, once the banks are sorted, will SICAG be seeking justice for their members against EC?

QUOTE]

Here Here!!!! Iron halo, a lovely statement. EC shoould be left high and dry like his clients..

Some of his clients may like to leave him cemented and wet though!!

 

[Prime]

See what I mean about people's perception of SICAG? Can you undersatnd why some people what no part of it when this kind of thing is actually believed by the people on the committee?

No, actually I don't. The Storm model and beliefs of SICAG are unrelated.

EC and his employees knew the parameters....and blatantly ignored them. Both anecdotally and evidentally.

Actually EC established the parameters. (To the best of my knowledge)

 

[carey ramm]

Been reading the posts and there has certainly been some debate today.

Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.

Secondly who filled in the majority of those dodgy loan applications that the banks failed to check. Storm had its own internal loans processing unit and these are the people who dealt with the banks. The problems started here inside Storm then flowed through to the banks. Where were the advisors when all this was going on?

Thirdly the Storm SOA. Well they were total crap that came out of a 1 size fits all model (if u could call it that). How the people who created them can live with what they did is beyond me. I have seen many SOA's from other financial planners that are good considered documents that are tailored to meet clients needs and goals. It is not correct to make generic statements that all SOA's are of the same crap standard as Storm's. If this was the case then why did we not see any other major planning firms and their clients come to grief in the market downturn like Storm?

Now i have seen all sorts of things that Storm did based on the points above. I have documented them and provided them to the regulators.

Prime, I actually posted this morning how the Worrells action fits in. I was very surprised to see Mark Weirs recent media comment on the subject and can only presume he was quoted out of context.

Firstly the Worrells action will provide a forensic investigation into how storm operated and will no doubt focus on the last year and what went wrong especially the issues of margin calls, the large ex gratia dividend payment and the role of directors in the last 3 months. Secondly, it will be timely with Storm directors and advisers in Federal Court in September this year while things are still fresh in their mind!! It really makes them start to answer the tough questions and put their fingers on the sticky paper. I think ASIC will find this very useful to supplement any action they may choose to make down the track. The Worrells action is also needed to fulfill their liquidation role as they may not have been getting the full co-operation of Storm diretors and staff in answering key questions about the collapse of the company. I believe every storm investor wants to know what, how, when and why Storm collapsed with the information give under oath.

I will be very interested to see where the money went at the end and who got payments. I would bet a nice bottle of red that we will see some familiar names pop up. Surely the directors at some of the satellite Storm offices could shed some light on this but isnt it amazing how quiet they have all been (with the exception of RJ) - why is this so????

 

[Monario]

Been reading the posts and there has certainly been some debate today.
QUOTE]

Hi carey, things really seem to be heating up over the last few days!!!

Carey I was wondering if you had any info on what is happening with BOQ/ macquarie/Challeneger...

I know that there has been some court dealing in recent days, but all my contacts seem to be blank at this stage in relation to these three as apposed to all the CBA/CGI info!!!

 

[Garpal Gumnut]

Been reading the posts and there has certainly been some debate today.

Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.

Secondly who filled in the majority of those dodgy loan applications that the banks failed to check. Storm had its own internal loans processing unit and these are the people who dealt with the banks. The problems started here inside Storm then flowed through to the banks. Where were the advisors when all this was going on?

Thirdly the Storm SOA. Well they were total crap that came out of a 1 size fits all model (if u could call it that). How the people who created them can live with what they did is beyond me. I have seen many SOA's from other financial planners that are good considered documents that are tailored to meet clients needs and goals. It is not correct to make generic statements that all SOA's are of the same crap standard as Storm's. If this was the case then why did we not see any other major planning firms and their clients come to grief in the market downturn like Storm?

Now i have seen all sorts of things that Storm did based on the points above. I have documented them and provided them to the regulators.

Prime, I actually posted this morning how the Worrells action fits in. I was very surprised to see Mark Weirs recent media comment on the subject and can only presume he was quoted out of context.



I will be very interested to see where the money went at the end and who got payments. I would bet a nice bottle of red that we will see some familiar names pop up. Surely the directors at some of the satellite Storm offices could shed some light on this but isnt it amazing how quiet they have all been (with the exception of RJ) - why is this so????

Thanks Carey , a reasonable summary of what is happening.

I still can't understand why SICAG , Moneyspidercentral, still do not even mention any of the adverse findings or upcoming investigation into Storm and the Cassimates.

Also their express endorsement of the Storm model in advising Stormers to only see financial advisers who do not charge hourly fees but rather commissions on products once chosen seems not just foolish but bizarre, especially as they imply that as that was what Storm did, it was the ideal.

It is good to hear from you as so many Financial Advisers seem to only have a Grade 9 education and Year 4 intellects and preschoolers drives for objects.

gg

 

[Ironhalo]

As usual Carey, good post mate.

 

[carey ramm]

Monario

With regards to BOQ I understand that Slater and Gordon are ready to lodge their statement of claim and get the legal process underway. I met with the person who is first BOQ cab off the rank last week and they are a very good choice. It takes a special person to stand up and be strong and take on a bank. I know this person reads this forum so i am sure they will appreciate your support. Of course once the first case is underway than the floodgates of other clients will open.

To be honest getting the CBA resolution process underway is a big task and this has been the focus of late. It is expected that all these CBA storm clients will be processed before christmas which is a massive task in itself.

I am sure the other banks will start to feature more prominently in coming weeks.

 

[Steve Borden]

Been reading the posts and there has certainly been some debate today.

Firstly I am not alone in saying that Storm gave crappy advice. Slater and Gordon have also said those exact words. Numerous others have as well. The Storm model was fundamentally flawed - pure and simple. It was clear in 2002 that the Storm model became stressed from a relatively small market downturn and many Storm investors got hurt financially. Did Storm learn from this? History tells us they did not. Quite clearly Storm directors and advisors did not understand the product they were selling. This is not surprising considering the chequered past of some of these Storm advisers in terms of past compliance issues with dealer groups prior to joining Storm.

Perhaps those who invested in the original ozdaq hi-tech fund could share their experiences also, especially those who were advanced monies to keep them afloat.

Is it just me or does it seem a conflict for an adviser to lend money to a client and then dictate how that money is repaid and from where the funds are sourced.

Makes you wonder in who's interest the advice was given.

 

[carey ramm]

Steve

I think i know one of the people u are referring to. It was despicable the way Storm preyed on these poor people after wiping them out with their 2002 Ozdaq screwup - launching an australian hi tech index just as the nasdaq was tanking.

It is certainly not ethical to loan funds to clients who are in difficulty as a result of your poor advice and then get them to access their superannuation to pay out some of the losses and then bleed them dry over a 5 year period. And this was a person who EC handled personally. Storm certainly didnt abide by the credit act. Lots of loan irregularities on this one as well.

This is one case that has been referred to the regulators.

 

[cuttlefish]

From the SICAG web site:

"Before you commit to anything, ask about fees!

Remember, the Storm Fees model charged nothing for discussions until something was actually done. Most of the financial planning industry charge fees for each appointment regardless of outcome!"

This quote from the SICAG web site makes it pretty obvious to an independant observer that SICAG is a sympathiser of Storm financial group and their model. This statement can be seen as directly supporting one aspect of the Storm model.

Storm charged nothing for the first appointment ... the old adage of "you get what you pay for" certainly held true in this situation.

SICAG are pushing it uphill if they think they will convince people they are independant and not Storm sympathisers.

I think that just about every financial planning company in the country uses a template software to generate financial plans, SOA's , SOAA's ...

The only thing that would be massaged in the SOA's would be the numbers and names if the individuals.

Be under no illusion ... THIS IS COMMON PRACTICE THROUGHOUT THE ENTIRE FINANCIAL PLANNING INDUSTRY!

For example here we have someone that claims to be a representative of SICAG using upper case text in their posts ("shouting") in order to defend Storms SOA's. Very independant

 

[Solly]

I found this submission rather interesting,

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

This submission alleges that some loan document details were falsified.

 

[Monario]

I found this submission rather interesting,

http://www.aph.gov.au/senate/committee/corporations_ctte/fps/submissions/sub225.pdf

This submission alleges that some loan document details were falsified.

WHOLY Moly!!!! thats a doozie, this is a must read to all on this forum!!