I acknowledge the duty of care statements but to me primary issues are the risk assessment and evaluation undertaken by the Stormers regarding the Storm gearing strategy. I'm sure not many would have sat down and completed a thorough Risk Impact Grid or Probability Chart to assess the probability of occurrence and impacts of risks. Maybe many, like Frank, have key competencies in other areas and not in the "dark arts" of Financial Planning and wealth accumulation and creation, after all that is why the Stormers were seeking professional guidance in this area.
I believe many could not identify and evaluate the risks that were involved especially if they lacked an in depth understanding of how the model worked as presented. I'm not sure how Stormers could properly determine likelihood, determine consequence, estimate the level of risk and prioritise risks when not all the data presented to them was accurate, especially as it would appear around the in-house portfolio software monitoring system safeguards. I'm sure there were very limited ways and opportunities for Stormers to identify and evaluate treatment options and implement treatment plans when things went awry. I'm sure these responsibilities were innately transferred to Storm as a risk mitigation strategy when they accepted the advice.
Just another comment about the 80/20 Pareto principals previously mention in this thread, I have asked one Stormer about why they still pursued the Storm strategy after as it appeared many walked away after seeing the investment overview. Their response was that they thought that they were on a sound footing as it was not mainstream and that they were part of the select few who were following a new way to wealth creation. I wonder what deliberate techniques were used to reinforce the sales pitch.
Hi Solly,
I think at times we are seeking to make the Storm fiasco more complicated than needs be.
Some on this forum are still failing to (or do not want to) grasp an important fact. We paid a lot of money to Storm so we had every right to expect expert sound financial advice. Further, we had no reason not to trust such advice.
IJUSTKNEWIT posted the following question recently:
“Well Frank no one seems to want to take your challenge based on the fact the are not legal people and admit they know little about the law. So we must assume that when needed those same people seek out a lawyer or someone that is familiar with the law when they need help. Should they not be self educated in Law and know what they are signing, the same way the Investors should have been self educated in Financial Planning and knew what they where signing?"
This, to my mind, is one of the most pertinent questions asked on this forum! When one employs a professional in any given field, one is relying entirely on that person’s advice because that professional is selling his or her expertise. Therefore, to claim, as some have, that we were foolish to trust such individuals is a nonsense. We relied on financial advice from qualified people in much the same way one would rely on any other professional, be they a lawyer or otherwise.
If a lawyer represents you case poorly in a court of law there is little you can do about it. You are entirely in his hands and you certainly do not any time try to tell him about the law. Indeed, how could you because he, not you, is the expert. That's what you pay him for!
There is no difference where a financial adviser is concerned. You rely entirely on his or her knowledge of the market place and if that financial adviser's advice is poor then you must wear the consequences.
However, the Storm saga is not about poor advice. If it were, the directors of Storm and the Banks involved with Storm wouldn’t be in the dock.
As professional financial advisers, Storm’s job was to evaluate risks and be mindful of our needs, not theirs! Storm and the Banks as financial advisers and institutions had a duty of care that is undeniable. There is no way a person that had no investment nous (most of us) would deduce that the Storm strategy was
'high risk'. In fact Storm did everything to convince its clients otherwise. Storm had to because their clients wouldn't have entrusted their money with Storm if it hadn't!
Many professional people put their trust in Storm. I was one of them. In our own fields we are considered experts (I have the qualifications and cv to prove it), but it doesn’t follow because we are experts in one area, it necessarily follows that we have the necessary acumen in another.
My field is international logistics. If someone were to entrust their freight forwarding needs to me, informing me that the cargo in question was considered
"dangerous cargo", and I omitted to tell the shipping company, whose fault would that be? Further, if as a result a fire broke out on board a ship caused by such cargo, should I be blamed or my client. To therefore imply that the client must also share part of the blame in such circumstances (as some uninformed people on this forum claim) is a ludicrous notion. The fault would remain entirely mine for doing the wrong thing. How could my client possible know that I wouldn't do the right thing by that client?
That’s why I cannot go along with some Stormies who somehow or other hold themselves to blame in all this. "How could you possibly that the people you were dealing with were fraudsters?" They lied to us, deceived us, and used our assets for their own personal gain. They are entirely to blame, not us, not you!
For those that still insist despite the evidence that we should share some of the blame, please explain why you (who have already admitted that you know little about the law) would place your trust entirely in the hands of a lawyer, but would treat another professional such as a financial adviser differently? If you can give me a satisfactory answer, I might take the comments by people such as Bunyip seriously! He hid from view when this question was first asked. Maybe he would now care to enlighten us with his wisdom???