"ASIC defends role in Storm Financial collapse"
"AUSTRALIA'S corporate watchdog has defended its role in dealing with the collapse of advisory firm Storm Financial."
More by Paul Osborne from AAP on NEWS.com.au here;
http://www.news.com.au/story/0,27574,25947140-29277,00.html
Maybe everbody needed Big Max brought in earlier.
Serious question here abagnale, but why Big Max?
I am still having an issue trying to work out the complex interconnections between all the parties in this saga. I cannot understand how the CBA & Storm came to such a bitter falling out. I would have thought that in business you do all you can to ensure any problems you are having are kept behind closed doors and you negotiate a mutually beneficial resolution. And you do everythiing possible to enure your brand is unsoiled in the public arena.
To an outsider the whole debacle looks very sloppy.
Maybe everbody needed Big Max brought in earlier.
I am still having an issue trying to work out the complex interconnections between all the parties in this saga. I cannot understand how the CBA & Storm came to such a bitter falling out. I would have thought that in business you do all you can to ensure any problems you are having are kept behind closed doors and you negotiate a mutually beneficial resolution. And you do everythiing possible to enure your brand is unsoiled in the public arena.
To an outsider the whole debacle looks very sloppy.
Maybe everbody needed Big Max brought in earlier.
.How did Storm and CBA have such a bitter falling out?
Simple.....Storm believed their cosy relationship with the banks, particularly with CBA, would ensure favourable treatment for Storm clients when the market ran into trouble
Alan Kohler's commentary in Business Spectator regarding ASIC's new stance on commission-based financial advice makes good reading imo
http://www.businessspectator.com.au/bs.nsf/Article/Ban-pd20090819-V2SMZ?OpenDocument&src=mp
I think the idea of charging a fixed fee, payable over a set period, would lead to more "ordinary people" having faith in the value of advice, which would likely also lead to more people being prepared to pay for a financial plan in the long run. Given that the advice would not be commission-based, and therefore have no bearing on the reward to the adviser, it would be far more likely to include strategies that encompassed property investment, bond or fixed-interest holdings as well as share/managed fund portfolios, and would likely be far more balanced in favour of the investor than the advice handed out by the majority of advisers these days - which is naturally skewed towards products that return a commission.
Now if only someone could convince the govt that the cost of having a financial plan prepared could be tax deductable straight up.
I'd rather planners acted in the form of mentors. People to bounce an idea off before taking action but having absolutely nothing to do with the actual investing process. Only invest in your name over your own signature at your address and with your own broker.
The other role I'd would like to see for planners is advice on tax effective investing but again no role in implementing those investments and estate planning.
Then you could throw SoAs, FSR Act and all that other crap where it belongs - down the toilet.
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Don't forget, bunyip, that the CBA also called in the commercial loans on Storm the business. Usually, that only happens when a bank is not confident that the business is viable, ie will not be able to pay the interest on the loan let alone repaying the loan itself. And once a commercial loan has been handed over to the credit department look out because those boys and girls don't even love their mothers let alone a business proprietor whose business has gone sour.
And that's all well and good in theory - but what some of you don't seem able to grasp is that not every Australian in need of financial guidance is capable of managing their own affairs - for various reasons, but lack of knowledge would be the main one. How do you bounce ideas off a mentor if you simply don't have any ideas to start with?
I know it shouldbe possible for all of us to run our own investments - but some folk simply lack the intellect and/or ability/confidence/whatever. I've nothing but respect for those of you who have spent years handling your own financial decisions - but not everyone has that ability.
Some people would definitey be better off if never allowed to make their own decisions.
You do not need a qualification in financial planning to realise that a complex and risky stock market investment is probably not appropriate for a woman in her eighties. Having no financial qualifications, however, did not stop a salesman from St James’s Place, the wealth manager, from persuading Benitia Middleton, 80, to move £216,000, the majority of her life savings, from cash into a risky investment bond.
By the time Mrs Middleton’s children found out about, and sold, the investment, she had made a real-terms loss of several thousand pounds. Had Mrs Middleton left her £216,000 in cash, she would have been about £70,000 better off. The St James’s Place salesman, meanwhile, pocketed about £12,000 commission on the deal.
Part of paying for a plan would involve being educated about the myriad choices that exist. Sometimes it pays to have someone point out to you what it is that you don't know.
Young people's financial direction could be altered drastically by sitting down and discussing with a qualified planner what their goals and financial aspirations are, and learnng the options available to acheive them. In an ideal situation parents/schools provide basic info re budgeting, saving, etc - but we all know this doesn't always happen in the real world.
You start by being interested and reading books, scouring the internet, joining the Australian Shareholders Association or Australian Investors Association and asking questions, such as on this site, until your bore other people totally sh!tless.
Yes they do. Anyone with average intellect can manage their own financial affairs. It is just having the confidence to do so but see my comment above. However, they also need to be prepared to lose money sometimes (but not in the manner of Storm clients)
Only if you wish to complicate things. Do you really wish to know about puts, calls, collars, CFDs, alpha, beta, vega? If you don't , then don't and leave them alone. I am more than happy to leave them alone and muddle along in my own simple way as I live my simple life. And bugger the rest.
Generally, they take no notice of us now, as we took no notice of our parents, so why should they take notice about finances? Sitting down and talking or thinking things through does not have the immediacy that quite a number young people crave and want. And taking away the ability to make mistakes takes away the element of leaning that not everything is safe.
As for introducing it to schools, pleeeeease no more loading of the already overloaded curriculum. Half the blighters cannot even spell let alone write and as for the level of numeracy, forget it. Universities are having to do remedial courses to get some of their students to be able to write fluently, so it would be better if these worthy institutions of higher learning concentrated on the basics, knwn as the three R's. Oh, the horror of it all.
Anyway, where are these wonderful financially literate teachers to come from? It is distinctly possible given their demographics they they are in debt to their collective eyeballs and would not even know how to balance an account let alone the ins and outs of a general ledger.
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