Storm Financial Group

[Glen48]

From what i am lead to believe Mr. & Mrs. Storm have collected the loot and done Sakes and living O/S???
Also the Jet and all the other trappings can't be collected by the receivers.
This is one law that needs to be changed if ever there was an incentive to rob it is this law.

 

[Solly]

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.

Alice give the Financial Planning Association a call that's a start.

 

[alice]

Thank you - I will look them up and call them after the long weekend.

 

[awg]

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.

In my opinion, you should immediately contact an accountant and or solicitor.
Hopefully you already have access to ones that you have dealt with before.

Immediately obtain the appropriate email address of your FP, Margin lender and Managed Investment Fund, send them all a receipted email stating you are unable to contact your FP and wish to make changes to your financial arrangements.

As soon as you have decided what they are, after discussion with the above mentioned, send receipted emails to the relevant organisations, requesting what you want done, and confirming the outcome.

Once you have done that, issue crystal clear instructions via receipted email.

Re the accountant and solicitor...they will probably cost you about $150- $250 per hour.

I recently spent $1000 for a solicitor to do a few hours work for me, that ended up probably saving me about $10,000 over 2 years.

You may wish to discuss your situation with other FP organsitions, if you lack the knowledge or confidence to manage your own arrangements.

If you can find a good one, they should be able to assist you to resolve your situation.

If you cannot contact your FP at all, might be worth phoning ASIC to see if his company is still operational, definately attend his office in person, if possible and attempt to ascertain, if he is just on holidays or has dissapeared..I personally would ask neighbouring businesses...I would also not hesitate to track him down to his home address ( preferably by phone)

 

[daisy]

http://www.theage.com.au/news/busin...-under-scrutiny/2007/03/19/1174152976959.html

awg posted this website a while ago about financial planners indemnity insurance. Its dated 2007. Does anybody know if the amount of the payout was upgraded as the article suggests it would be?

 

[daisy]

I am an ex- Storm client.
We have now been left with a debt of $630 000. Looks like the house will go after all.

Stung, as if you weren't already dealing with enough. From one who has been there I know there is nothing I can say or do. I hope you all get through this O.K.

 

[Julia]

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.

The lawyers being engaged by the banks, Challenger, and for that matter the Storm principals are somewhat unlikely to be dependent on the no win - no fee arrangement.

 

[Julia]

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, I'm so very sorry about your situation, just awful for all of you.
If you've kept written records of all your contacts with your adviser that will be useful. If you haven't, perhaps write down now as much as you can remember with dates if possible. This will probably drag on for years and your memory will fade.

I so hope the prognosis for your child turns out not to be the case. Doctors are not always right.
Best wishes.

 

[Smiley]

"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." My adviser stated exactly the same thing Stung.

I am so sorry to hear your story and while I have heard many similar and am also involved it supsets me.

If you are in Townsville there is an action group meeting at 6pm at Ryan Community College Hall.

 

[bunyip]

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’.

When it comes to investments, expecting sound advice from financial planners is like expecting sound advice from a car salesman. The Holden salesman will outline numerous reasons why you should buy a Holden, the Toyota salesman will put forward his most compelling argument on why a Toyota is the car for you, while the Ford sales staff will obviously espouse the virtues of Fords.
Can this possibly be regarded as impartial or useful advice? Of course not.

Financial planners are tarred with a similar brush. Impartial advice....forget it - the investments they'll recommend are the ones that pay them the highest commissions.

Why do you have to understand finances? Because if you don't, you run the risk of getting yourself badly burnt by those who will take advantage of your ignorance....just ask any Storm client.

 

[daisy]

The lawyers being engaged by the banks, Challenger, and for that matter the Storm principals are somewhat unlikely to be dependent on the no win - no fee arrangement.

Of course. I forgot about that side. That'll be costing them. Maybe it will be cheaper to settle? fingers crossed.

 

[Trevor_S]

This is one law that needs to be changed if ever there was an incentive to rob it is this law.

I don't agree with that. I know if I had no protection of a company I may have been unwilling to start my own business back in 1994. Starting a business and having it remain successful can be difficult enough without having to put the very shelter over your head on the line.

No amount of legislation will ensure that shonks and those that are easily taken in by them are protected.

The things I see as some sort of protection are more hourly fee based FP's and education both at a rudimentary school level (something Paul Clitheroe has been arguing for decades) and self taught like many here, that and stay away from things you do not understand.. which is why I stay away from some investment sythetics etc, way to complicated for moi.

That aside...

I suspect that those who are unwilling to help themselves are often beyond help. Trying to save everyone will see the rest of us suffering adversely, as we do now under tomes of legislation. A justice system that seems too difficult for nearly everyone to understand, a tax act that is incomprehensible to even the ATO, a superannuation system many don't comprehend and the list goes on. All we can do is provide everyone with the same opportunities that everyone has available to them in regards financial education and if people don't want to avail themselves of that, then they need to live with the results of that decision.

While I feel some empathy for those who suffered financial hardship from the Storm debacle, they live in a world of their own making. My margin loan LVR was at 40% at the end of December, until I decided to pay it out last week entirely with cheaper financing.

It's the same with my business (which has had no debt for about 7 years and only every grow from cash flow after that). I do not rely on my Accountant to tell me how well it's doing I look at the figures myself and have my Accountant prepare my tax for me and that's about it but I know MANY business owners that have no idea how well they are doing until there Accountant tell them. If I had an FP I would similarly not rely on them to let me know how my investments were doing, I would know myself I would want them to provide me information and options on things like Super, Insurances, Trust structures etc certainly not on what leveraging options are suitable to my circumstances, nor what level of leveraging I feel comfortable with.

It's inappropriate use of debt that appears to have had those in Storm in dire circumstances come unstuck. That, and the ability of the "salesmen" to talk the clients around.

 

[Solly]

Trevor great post thanks. Poor use of credit has seen three of my associates hit the wall. Very ugly outcome.

 

[Solly]

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.

Your post has left me speechless

 

[Julia]

Of course. I forgot about that side. That'll be costing them. Maybe it will be cheaper to settle? fingers crossed.

I doubt the banks will see it that way. They will be more about protecting their reputation than their bottom line. And rightly so.

 

[Julia]

I don't agree with that. I know if I had no protection of a company I may have been unwilling to start my own business back in 1994. Starting a business and having it remain successful can be difficult enough without having to put the very shelter over your head on the line.

No amount of legislation will ensure that shonks and those that are easily taken in by them are protected.

The things I see as some sort of protection are more hourly fee based FP's and education both at a rudimentary school level (something Paul Clitheroe has been arguing for decades) and self taught like many here, that and stay away from things you do not understand.. which is why I stay away from some investment sythetics etc, way to complicated for moi.

That aside...

I suspect that those who are unwilling to help themselves are often beyond help. Trying to save everyone will see the rest of us suffering adversely, as we do now under tomes of legislation. A justice system that seems too difficult for nearly everyone to understand, a tax act that is incomprehensible to even the ATO, a superannuation system many don't comprehend and the list goes on. All we can do is provide everyone with the same opportunities that everyone has available to them in regards financial education and if people don't want to avail themselves of that, then they need to live with the results of that decision.

While I feel some empathy for those who suffered financial hardship from the Storm debacle, they live in a world of their own making. My margin loan LVR was at 40% at the end of December, until I decided to pay it out last week entirely with cheaper financing.

It's the same with my business (which has had no debt for about 7 years and only every grow from cash flow after that). I do not rely on my Accountant to tell me how well it's doing I look at the figures myself and have my Accountant prepare my tax for me and that's about it but I know MANY business owners that have no idea how well they are doing until there Accountant tell them. If I had an FP I would similarly not rely on them to let me know how my investments were doing, I would know myself I would want them to provide me information and options on things like Super, Insurances, Trust structures etc certainly not on what leveraging options are suitable to my circumstances, nor what level of leveraging I feel comfortable with.

It's inappropriate use of debt that appears to have had those in Storm in dire circumstances come unstuck. That, and the ability of the "salesmen" to talk the clients around.

You've essentially said it all, Trevor. Couldn't agree more. Post of the thread imo.

 

[maccka]

Storm Investor Consumer Action Group (SICAG)

Storm clients may be interested to know that the Storm Investor Consumer Action Group (SICAG) are starting to get up and running and have started to put together a website (not quite finished but starting to look very good).

http://stormfinancial.info/index.htm

They are holding a meeting in Townsville next Wednesday night.

Details about the meeting can be found here.

http://stormfinancial.info/index_files/Page716.htm

The e-mail contact for the NQ chapter of the group is sicag_tsv@live.com.au

Please be patient in waiting for a reply as it is manned by a volunteer who is giving up his own time to try to coordinate a NQ response.

Hope this helps you. Good luck.

 

[daisy]

In relation to the FP indemnity insurance:

I found this on the net.

http://www.fpa.asn.au/files/PubAnnualReport07.pdf

It is the annual repurt for The FPA 2007

I'm not good at reading through all the guff but on p.17 it looks as if the payout limit was being mooted to increase to 280k from 100k

It looks as if the FPA weren't happy about it but

http://www.mccullough.com.au/publications/publications.aspx?p=47&itm=2216

gives me the impression that an upgrade of some sort did occur.

Even the full amount (if it were 280k) probably won't be enough to cover some people's losses but at least it's reasonable start again money.

 

[daisy]

In relation to the FP indemnity insurance:

I found this on the net.

http://www.fpa.asn.au/files/PubAnnualReport07.pdf

It is the annual repurt for The FPA 2007

I'm not good at reading through all the guff but on p.17 it looks as if the payout limit was being mooted to increase to 280k from 100k

It looks as if the FPA weren't happy about it but

http://www.mccullough.com.au/publications/publications.aspx?p=47&itm=2216

gives me the impression that an upgrade of some sort did occur.

Even the full amount (if it were 280k) probably won't be enough to cover some people's losses but at least it's reasonable start again money.

Sorry everyone I'm only half awake. I meant to add this:

Now that I have more understanding of this insurance and given the terrible advice people were given in regards their level of gearing and the battle they had to get out when they wanted to I think a claim against this insurance would probably be successful.
The reason ASIC upgraded the payout limit was because of all those investors who had been sold Westpoint by their FPs.

 

[daisy]

Here's a thought for future users of Fps

Spread your risk. Don't put all your eggs in one basket.

Find out what the payout limit actually is and spread your money across different FPs so you never have more than the upper payout limit with anyone of them.

Before the bank guarantee last year I ran around and spread our money over 4 banks. My husband thought I was nuts but it was part of my "sleep at night" strategy.

It seems as if C. offered some of his clients assurance by talking about insurance. But he would have known there was an upper payout limit. If I was in the clients situation it wouldn't have occurred to me to ask that question and he banked on that.