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Storm Financial Group

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Even the professionals and the experts have been caught by Madoff. So, what hope does the ordinary person have?

So, I have gone back to the age old philosophy "if it sounds too good to be true, it most probably isn't."

I think it all comes back to greed. Despite mathematical proof that it was impossible for the Madoff scheme to make the returns that it was making, nobody wanted to listen

The same goes for the Storm debacle. Even if someone had advised some of the victims of the risk and not to do it, do you think they would have listened?

The promoters were excellent salespeople and very impressive with their lavish lifestyles and parties (similarity with Madoff) they exploited one of our primitive instincts - GREED.
 


People should have right to expect sound advice from Financial Planner.

After all you are not expected to understand how bus or train works and you are not expected to drive it.

You are also not expected to understand or conduct open-heart surgery.

Why do you have to understand finances, after all you pay money to have it arranged for you.


Problem is FP often do not look after you but only care for who pays them more commission, retainers and ongoing payments for the life of investment.

High-risk investment should not represent high proportion of retirement investment.
Also investment should be structured to never evaporate completely.

It is not hard to achieve, but FP are not too interested, as it effectively cuts into their chop and they are not that ‘stupid’.
 

You're right of course, people should have the right to expect sound advice from a financial planner. But that isn't the reality as you yourself,have pointed out
 
People should learn to manage their own money

It amaze me, people go to uni, get degree work so far for their cash yet they don't put any effort into understand
how to manage their money and just blindly hand their cash to someone else to manage
 
daisy said:
You're right of course, people should have the right to expect sound advice from a financial planner. But that isn't the reality as you yourself,have pointed out
Click to expand...

I would push it a little bit further, responsibility should be with FP after all if train/bus driver does something wrong is responsible for their actions, you do not sign the clause – understand how it works and enter at your own risk.

How come FPs get away with it?

Is it ever going to change?

Hope it is not going to change the other way that you’ll have to understand and do everything yourself after paying a fee for the professional.
 


No - but people do occasionally get caught in train, plane, bus and ship wrecks - sometimes at the hands of drunk and/or incompetent drivers/pilots/captains.

And there are good surgeons and bad surgeons. (I'm pretty sure the bad ones are usually performing less intense procedures than open heart surgery though!) e.g. 'Dr' Jayant Pattel in Queensland managed to do an enormous amount of damage and cause quite a lot of deaths before 'the system' eventually pulled him up.


If your surgeon, who just came back from the ACME prosthetic limb conference/ XYZ Pharamceuticals stomach bypass technology conference etc. and is eyeing off the latest yacht catalog whilst recommending you have the latest you beaut treatment performed ... well ... lets just say that not many people have major surgery without getting at least one second opinion and usually a few second opinions.

(Obviously the vast majority of medical professionals are highly ethical but that doesn't mean they don't get swayed by slick marketing - we've all seen the pressure the pharmaceuticals put on Dr's - every thing on their desk is branded by one drug company or another - they go on conferences funded by pharma's etc. - its hard to believe that they all manage to maintain 100% objectively when being bombarded from all angles in this manner).
 

I completely agree - and so does Corporations Law. Your financial adviser and the firm they are employee representatives of are licensed with ASIC and have a fiduciary responsibility to deliver advice that understands and is tailored to your financial circumstances and objectives.

In this case, they have failed in their obligations and instead acted in blind self-interest. Complaints need to be raised, compensation for irresponsible and damaging advice needs to be claimed and charges need to be laid. It is time for this industry to be held accountable for their actions so the responsible operators (and there are many) do not get tarred with the same brush as these miscreants.
 
I guess the problem is that people think they have the right to expect sound financial advice from an FP.
That is what this forum is all about.

People should be able to expect sound financial advice from an FP.
But because of trailing commissions etc I don't have any idea of how the industry could transform itself into one which meets that expectation.
 

There lies the conflict of interest and people continue to lose money listen to someone else...Better off look after the money yourself..

You can not provide people good advices when your salary is based on commission.. Look after the clients interest and you could be out of a job or earn little..or stuff the clients and earn yourself big bucks.... hmmm

Read Warren Buffett The snowball and he absolutely hate his stock broking job early in life as there it conflict with his clients interest...sell crab stocks to client to get better commission or quality one where it get very little commission. He end up quiting and becomes an investor instead where his money and client money sit on the same side.
 
How do you determine what is sound and not sound. The law is already in place for those who give unsound advise with the intend to commit fraud.
 
vincent191 said:
How do you determine what is sound and not sound. The law is already in place for those who give unsound advise with the intend to commit fraud.
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I don't actually know, but I'd be surprised if Storm's faulty advice could be proven as being given with the intent to commit fraud.

And presumably it will be legal definitions such as this which will determine whether they are eventually actually charged with anything at all.

Meantime, the lawyers will wage a campaign of trial by media (already happening) and be in no hurry to reach a conclusion as the megabucks roll in.
 
Julia, I think the lawyers doing this are the ones that you don’t pay unless you win. So I don’t know about the megabucks rolling in. Unless you mean all that lovely free publicity that they are getting in their trial by media is bringing their name to the fore and other unrelated cases are rolling in as a consequence.
 

I'd expect expert advice especially with the money they would be making out me
 
Solly said:
I'd expect expert advice especially with the money they would be making out me
Click to expand...

Yes I would too. I’d actually think that the higher the fees the better the quality of advice I’d be getting.
 
I have been speaking with a couple who have lost their life savings and are about to lose their house after being stormified. They are terrified about what is ahead and have asked me for help. I come from a background where you are used to seeing hard things but even I found it difficult to listen to their story. They were about to enjoy retirement but now it is back to work. But they still blame the Comm Bank and not storm for their dire state. They still believe the strategy was sound. I wonder how many other are like this?
 
V191, Peoples greed is most of the trouble, what makes me mad is 99% of all financial advisers are only sales men, no different to a car sales man, would you give your life savings to a car sales man
 
Townsvilles Bulletin today has an article about SICAG.

In it Mr. Scattini of Sater & Gordon says
"Some of the paperwork I've seen appears to have been forwarded on behalf of clients who had never sighted or signed it"

I can't tell from the article where it was forwarded on to ,it could have been to the index fund, but if it was to the banks and they gave out money without signed documentation?????
 
I am an ex- Storm client.
When we first joined storm 2 years ago we were very clear about our objectives. Our only child has a short life expectancy and I wanted to stop work and spend time with him. If we made a little extra cash from our investments we wanted to spend it now rather than later to take him on an overseas trip before he became too ill to travel.

When we had made a paper profit of $180 000 I went to see our advisor to ask for some money to spend,reminding him of our objectives. He was very dismissive of my request and told me I would be silly to remove any profit after such a short time as our investment was not big enough yet. We are in our mid and late 40s and he said as we had left it so late to invest we would be best to build up a bigger portfolio. I actually backed off with my request after a while because I started to feel greedy for asking for some of my own money.

When the market was falling at an alarming rate I made several phone calls to our storm advisor looking for reassurance that all was well. At several of these calls I suggested that we sell and cut our losses. This was actively discouraged and he told me to trust storm as they were watching our portfolio closely and he would keep us out of trouble. I told him that I was afraid of losing our house. He said the only way that would happen was if the market got so low that the banks would collapse and in that case their would be no bank left to collect the debt.

When they finally cashed us out he said it was to " temporarily quarantine our capital in cash" until such time as we could re enter a rising market. When we saw him at a face to face meeting later he revealed to us that there was no chance to re enter the market as there was no money left to do so.

We have now been left with a debt of $630 000. Looks like the house will go after all.
 
stung said:
We have now been left with a debt of $630 000. Looks like the house will go after all.
Click to expand...
Mate that is absolutely awful, you well and trully have a case against Storm as I believe there is a provision with any AFSL to ensure that the advice provided is appropriate for your risk profile/personal situation (it would appear that Storm's advice clearly wasn't). I sincerely hope things eventually work out for the best for you.
 
I have been following this forum after finding it when googling Storm Financial.

My financial advisor was one whose business was acquired by Storm. I am very fortunate that my investments are with the Managed Fund he originally arranged and I have “only” suffered the losses most people have on the spiraling All Ords.

I have a margin loan which is not at margin call, however I am losing sleep over this and have decided to opt out altogether. My peace of mind is worth more that any profits I may eventually make.

This may not be the place to ask – but as this advisor is not answering calls, or emails and seems to have disappeared I am hoping someone may tell me – how do I organize to do this – do I approach the bank who holds the loan or do I approach the fund. I am an absolute novice and have no idea where to start.
 
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