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!
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.
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?
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.
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.
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.
Of course I don't know who they all are!
... 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.
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).
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?
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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!!
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.
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.
Been reading the posts and there has certainly been some debate today.
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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!!!
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????
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.
Prime said: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!
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.
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