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Storm Financial Group

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Why, what a pleasant surprise, is this you Ron?

Can you please, in the spirit of seeking justice for Storm clients, explain to me why my family who were your former clients before Jelich-Jones sold out to Storm, were all wiped out with no one in your branch selling them down when they ordered the Redcliffe advisors to do so back in Oct?

Last I recall, Storm principals were making 'big bonuses from sales' as well while they step-invested retirees into further hock just as the GFC was in its full stride. Pot, kettle, meet black.

Yours in justice,
Ironhalo
 

Wait about mate.

An SC mate of mine assures me that these transgressions are in the criminal area as well as the civil.

I doubt you will get much dough back ( I hope you do though mate) , but many of these jokers will end up behind bars.

I am assured that both the Commonwealth and Queensland DPP's have been briefed on this debacle.

Fraud is fraud.

gg
 
Solly said:
gg, what's your take on the SICAG submission?
Click to expand...

Thanks for asking.


  • Its better than I thought it would be.
    Its a bit full on with "poor me" sentiments, this is a Financial Inquiry, not a Lifeline meeting.
    There is an underestimation of Storm and the Cassimatis' culpability in the debacle
    The criticism of the banks and managed funds role is apposite and correct imho.
    There is no declaration of interest, of the committee members being relatives of ex Storm advisors and in fact ex Storm advisors, which may attract allegations of bias.
    It didn't have any moneyspiders or Storm advertisements on it, which was a plus.

gg
 
"CBA chairman Schubert to retire"

"The focus will now switch to the future of Ralph Norris whose term as chief executive has recently been mired by the Commonwealth Bank's involvement in providing inappropriate loans to clients of the collapse financial services firm Storm Financial."

More here from Peter Ryan on the ABC;

http://www.abc.net.au/news/stories/2009/08/06/2648313.htm
 
"Storm investors say ASIC should be replaced"

"Financial regulators need to improve their monitoring and policing skills to identify and stop rogue advisers before they cause widespread losses, former Storm Financial investors have recommended to a federal parliamentary inquiry into the $3 billion collapse."

Read more by Duncan Hughes on page 51 in The Australian Financial Review of 7/08/2009.
 
Solly said:
"ASIC calls for review of laws"

"FINANCIAL advisers should be required by law to act in the best interests of their clients, ...
Click to expand...
This comes across to me as a pretty extraordinary statement.
I'd have thought acting in the best interests of clients should be the prime function of a financial adviser and assumed.

Yes, I know financial advisers have rather had their own interests at heart, but to make a public statement like this is damning indeed.
 
Julia unfortunately ASIC are spot on in what they say on acting in the interests of the client - presently there is no legal obligation. In our submission we address this right up front.


I know that in speaking to one storm adviser who worked previously for another financial planning firm before joining storm, that they were very concerned about the storm model and the sales approach and the loan documentation. When they raised this with the directors they were told they didnt know anything and belittled. So this adviser then continued putting large numbers of storm clients into this flawed model (and collecting very large bonus cheques along the way) all the time knowing what they were doing was wrong.

There were also some advisers that left Storm after realising that the models were flawed and the processes dodgy.

This is why we need to push for change in this industry.
 
Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.
 
Julia said:
I'd have thought acting in the best interests of clients should be the prime function of a financial adviser and assumed.
Click to expand...

It is ... by good advisors and by bad advisors as well. I am sure STORM would have preferred their clients made money ad infinitum, that they didn't is simply a reflection on shi_tty advice. 30 seconds of looking into their model and you realise the risk from over leveraging. The best interest of the client is something that's impossible to define by law, and only helps with hindsight after it's all gone pear shaped, that's the rub.

No amount of complicating things further (ie changing the laws simply adds more complication) will change that fact. Those agitating for changes to the law are doing so for either their own political ends or are naive, with the only outcome being complication via obfuscation.

You can't protect people from their own gullibility and trying to do so makes it worse (for those of us who aren't gullible will now have incredible hoops to jump through or have access to products taken away e.g margin loans), it will not make the situation "better".

All they should do is ensure the first line of any disclosure statement should read

YOU REALISE IN SIGNING THIS YOU COULD LOOSE ALL YOUR MONEY, WITH NO RECOURSE.

and leave it at that. Everything after that statement in any PDS would be hyperbole anyway, just as it is now.

No amount of fiddle farting around with the law will stop charlatans ripping people off, nor stop the gullible giving their money to them.

I don't have a solution to that, aside from education and simplification.

If people feel the need to use a financial advisor, visit one that's fee for service only, at least you have some chance of getting untainted (but not necessarily good) advice.

Hell, Warren Buffet gives free advice ! If you can't afford to loose 50% of your funds, then stay away from the sharemarket (that loss will multiply many times over with leverageing)
 
Mr J said:
Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.
Click to expand...

But performance measured how?

If it is on returns it pushes advisors to take on additional risks to get a higher return, and therefore get more money...

Commissions should go, but I don't think that it is as simple as saying an advisor should be paid for performance...

A lot of the time clients want FPs to predict the future... it just isn't possible to be right 100% of the time...
 
In China I'm told the doctors usen't get paid unless the patient got better.

If that were the case with Storm, Julie Cassimatis would be buying her tableware in Crazy Clark's not in an online upmarket auction house.

Poor Storm bastards.

gg
 
I see AEC and SICAG in their respective submissions are quoting the results of the survey they conducted, that's all good but when I completed my survey I answered a question regarding who my adviser was.

I haven't seen the results for this one published, is this because the results show a disproportionate weighting to advisors who are friends or family of the SICAG executive?

If there is nothing to hide then why is it being hidden?
 

I think what they should do, is have two classes of financial advisor.

1. Call it "Financial Services Broker" or something. They are permitted to sell any product they want, but it should be pretty clear that they get paid by commission, and they are not permitted to charge fees for their services.

2. Call the second class "financial advisors". These people charge for advice, and are not permitted to recommend specific products, only types of investments. So they can say "You need a margin loan and leverage into an index fund - here is a list of 5 margin lenders in alphabetical order. This one has the lowest fees according to what you say, but you need to apply to them directly - I can't help you fill out the paperwork." They must make a statutory declaration once every quarter or so, to declare that they have not received any commissions for recommending products.

The problem is not that financial advisors are or are not acting in the client's best interest. The problem is that the average person can't tell whether they are or not.
 

Which is why I said half the problem. The only way to solve the problem completely is for people to educate themselves, which we know won't happen.

An advisor should certainly be paid by performance. It's the only way to guarantee - risk aside - that their interests are aligned with those of the client. Stopping advisors from ramping risk to generate high returns is an issue less easily solved, which is why I didn't mention it. No single sentence answer!
 
carey ramm said:
Julia unfortunately ASIC are spot on in what they say on acting in the interests of the client - presently there is no legal obligation. In our submission we address this right up front.
Click to expand...
Well, I find it quite pathetic that legislation needs to be enacted for something that should be automatic.

How would this legal obligation be enforced? Surely all the adviser has to do is say "well, I absolutely believed that the advice I gave Mr X was in his best interests". How is anyone going to disprove that?

And in the meantime he continues to feather his own nest, with little concern about the relevance of the advice to the client's situation.



Not really anything to say about such woeful moral bankruptcy. No wonder the industry has such a bad name.




Mr J said:
Fee structure should be changed to be mainly performance-based, commissions should be illegal. Half the problems solved right there.
Click to expand...
I don't see how you could have a performance-based fee. What would be the criteria? e.g. my p/f rises 10%, so I pay the FA 0.5%?
What happens if my p/f goes backwards? Do I get a refund?



Trevor_S said:
The best interest of the client is something that's impossible to define by law, and only helps with hindsight after it's all gone pear shaped, that's the rub.
Click to expand...
I agree.

Further agree. Seems like grandstanding and window dressing to me.
I can't see how it will make any actual difference.
 
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