Storm Financial Group

[bunyip]

Frank



Storm had a good sales pitch just like all good sales people. Some people are sucked in by a good sales pitch, some are not. Unfortunately you were one of the ones who were.

I said in the post above that Storm had a good sales pitch. But having thought about it a bit more today, I'm not so sure they did.

Storm managed to sign up only one in every four people to whom they gave financial advice.
The other 75% walked away.
A one in four strike rate might be OK, but I hardly think it rates as sensational.

Whatever the standard of the sales pitch, it obviously sounded sufficiently attractive to lure 25% into signing on as Storm clients.

 

[SJG1974]

There seems to be the same negativity to posts that suggest the bank shouldn't be in the firing line. My situation which isn't the same as others is as follows:

- I had my accountant check it out. He also sought external advice from another party which was positive (this is in writing):
- My Bank which held all my accounts for over 20 years (one of the big 4) and I was told "sound investment as they had many clients investing using this strategy"! Yes they have settled out of court!!!!!!!

I really do not think people on this site understand what happened. Yes it's easy to sit on the sideline and make assumptions however the evidence will be forthcoming in the upcoming trial which will see some on this site understand that we were not "wood ducks" we are real people who in my case did seek advice from many professionals.

I sought advice from professionals.

Was it sold to you as a conservative strategy though...and if so did your accountant and the other professional party confirm that it was conservative?

The reason I ask is that many of the Storm victims who have posted here have claimed the strategy was sold to them as a conservative strategy, when obviously it was far from it.

There is obviously a big difference between taking on the storm strategy to enhance your asset base using gearing, which is perfectly legitimate and sound (but risky), compared to using the strategy to protect your asset base in a conservative manner (which is what some have claimed) which is so far from sound it's not funny.

 

[Solly]

Hi Judd,

"I haven't read Frank's posts for awhile because they are too long winded and life's too short but I assume he is banging on about trust."

I'll therefore make this short in view of your limited attention span.

"Trust in the Lord and get a signature from everybody else. Sorry, motto of friend who was an auditor."

Good advice! We did that when we signed agreements! They didn't keep their end of the bargain!I don't think I can make it any simpler than that for you or any shorter!

Hi Frank

A good succinct and factual post in my view. On another matter I believe it was bunyip who likened the Storm event to "an accident waiting to happen". If this view is plausible, it does contain some merit. Let's deconstruct the scenario, accidents don't just happen, they are the result of various inputs, actions and usually a chain of events that results in harm or loss.

If a party to the event has experienced harm or loss there a mechanisms available for those aggrieved to make a claim for restitution or compensation. If this claim progresses the application for compensation or restitution is accessed, examined and evaluated. Compensation for pain, harm or loss usually follows. Also if it is deemed that an unlawful act contributed to the event this is referred for further examination and charges are laid and innocence or guilt is determined.

If guilt is ultimately established a determination is made and punishment or penalty is then administered to the guilty. This may not be dissimilar to the Storm scenario that many find themselves involved with presently.

S

 

[Julia]

There seems to be the same negativity to posts that suggest the bank shouldn't be in the firing line.

You might like to quote any posts which have claimed that the banks should not be culpable in any way.
I do not recall any member making such a statement, so it would be good not to distort what has been said.

To suggest that Storm investors had a personal responsibility to ensure the strategy they were buying was suited to their circumstances is not to say that no other person or organisation also had responsibility in the ultimate mess.

 

[Solly]

David Robinson, acting for ASIC, asked the court to remember it was a trial and the organisation should still have the right to call evidence not negotiated in advance.

He said ASIC wanted investors to have "every chance to put their evidence before the court".

More by Rae Wilson, APN Newsdesk @ www.qt.com.au

 

[jjtebj12]

Was it sold to you as a conservative strategy though...and if so did your accountant and the other professional party confirm that it was conservative?

The reason I ask is that many of the Storm victims who have posted here have claimed the strategy was sold to them as a conservative strategy, when obviously it was far from it.

There is obviously a big difference between taking on the storm strategy to enhance your asset base using gearing, which is perfectly legitimate and sound (but risky), compared to using the strategy to protect your asset base in a conservative manner (which is what some have claimed) which is so far from sound it's not funny.

My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .

We actually had several meetings and didn't enter into this without doing our homework.

 

[Vixs]

I could also trawl trough the thread to find where Frank stated that the strategy itself was sold to him as conservative, but it's not worth my time.

Apart from having a go at me for not comparing apples to apples, everything else you said is correct. Gearing to invest in the markets can in no way be considered conservative. Gearing certainly can be used as part of a sound strategy focusing on higher risk, higher return.

I apologise, the response I quoted came straight after a post where the word 'conservative' wasn't mentioned. After catching up on the next 15 posts there was indeed a lot of talk about conservatism, I can see where your position came from.

I would find it hard to believe that anyone was sold on the 'conservative' nature of Storm's strategy too.

 

[Judd]

My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .

We actually had several meetings and didn't enter into this without doing our homework.

LOL. That is so precious. What a dumb thing to do unless they were specifically employed and paid by you to offer financial advice on the Storm product.

 

[SJG1974]

My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .

We actually had several meetings and didn't enter into this without doing our homework.

There would appear to be two broad types of Storm clients-

1) those that were looking to build their wealth over time using gearing (which would appear to include you), and

2) those that wanted to protect their wealth (which covers a lot of the posters in this forum).

Yet, with these two vastly different client types, they were all sold the same thing....a high risk double gearing strategy That is where the problems start and where Storm failed in its duty to provide appropriate advice to its clients. The strategy was appropriate for those who knew the risks and were prepared to take them, but not for others who thought it was low risk and wanted to protect their wealth.

Did the professionals you consulted with tell you that it was a risky strategy? I would hope they were competent enough to at least get that part right.

Because that seems to be at the heart of the whole thing....people somehow went into this double gearing strategy believing it was low risk, even conservative, and designed to protect their wealth, when the truth was something completely different and should have been uncovered with even the most basic of research.

 

[Frank Ainslie]

Interesting grab from another site! http://www.bfcsa.com.au/index.php/entry/why-we-should-be-following-the-storm-financial-case-trial

Tuesday, 28 August 2012
STORM - BANK MAKES CUSTOMERS FRAUDULENT LOAN "DISAPPEAR".
I have recently been given this information from my advisor, a very reliable, honest, ethical business advisor with many contacts in Parliament & Government.
It relates to one of the people that lost a lot of money in the Storm Finance / Bank rip off. He has personally helped the lady by investigating her case thoroughly. Same method of fraud, with the banks using altered / forged / fraudulent documents either through Macquarie Bank or Bank of Queensland.

Due to his constant & diligent efforts, the BANK HAS MADE HER LOAN "DISAPPEAR".

She had received her usual monthly statement - and THE LOAN WAS REMOVED FROM HER ACCOUNT - IT WAS NOT SHOWING ON HER STATEMENT! They contacted the bank involved to make sure that there was no mistake and were told that there was no mistake -sure enough the loan was gone.

There was no explanation from the bank.

My/ her advisor then contacted the bank involved around a week later to make sure that the mortgage was discharged & the title handed back to her.

My advisor has told me that the reason that the bank has done it this way was to effectively ensure that nothing comes out publicly & therefore it is does not go ON RECORD against them!

 

[pilots]

My bank (who admitted they were incorrect in their advice) and my accountant went into great detail investigating the Storm product. For us it was about long term asset creation. We have written advice stating that the Storm formula was "sound financial advice". They also checked out the management and administration of our asset. We had two bank managers meet as we wanted their expert opinion before we entered anything. I have other evidence regarding the bank however that will be for a later date .

We actually had several meetings and didn't enter into this without doing our homework.

Your trouble was that all the people you was talking to was getting a kick back from Storm, what did you think they was going to tell you?????.

 

[jjtebj12]

Your trouble was that all the people you was talking to was getting a kick back from Storm, what did you think they was going to tell you?????.

YOU ARE TOTALLY INCORRECT AND YOU DO KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE SHOOTING OFF YOUR MOUTH WITHOUT ANY KNOWLEDGE!

 

[Frank Ainslie]

Reasons;727813]Trust is an interesting word as it is not normally given if there is substantial risk without a track record known intimately by a person. People usually allocate trust based on different risk levels...

• At a low level, we trust a parking meter timer is accurate so that we don't get back late and fined, but the risk to our financial future is not destroyed if it isn't and we are fined - and next time we are circumspect about all parking meter timers.
  
  
• At a higher level we trust that schools are teaching our kids properly, but if we have any respect for our children's educational outcomes, we are constantly diligent and monitoring the competence and ability of the teachers and that school initially to deliver expected outcomes. We then continue to do so on an regular basis, checking to make sure that our trust remains well allocated as it is critical to our children being able to go to uni or whatever and we are getting a commensurate return on the investment.
  
  
• When it comes to our life savings it becomes quite critical that trust is only allocated at an empirical level - what have YOU determined about this company's credentials and investing strategy that gives them the absolute right to earn your trust to invest your money with sensible levels of risk.

The Dictionary Definition of Trust...

Trust [truhst] noun
1. reliance on the integrity, strength, ability, surety, etc., of a person or thing; confidence.
2. confident expectation of something; hope.
3. confidence in the certainty of future payment for property or goods received; credit: to sell merchandise on trust.

The definition itself is split into HOPE (a desire, want or need) and ABILITY (proficiency, expertness).

• If you relied on the integrity of a company and HOPED that you would get whatever vision they told you at face value without recognising what trust actually means - I am sure you lost a lot of money.
  
  
• If you did due diligence on their ABILITY by closely checking that the advice they provided did not put you at significant risk for your age and asset allocation, I am equally sure you would have not lost much money.

Trust, in things that matter greatly to us, is earned through track record and detailed understanding of someone’s ABILITY.

Trust cannot be blindly bought and abdicated to others - that is confused trust - and at its best could be called HOPE.

Hi Reasons!

Hmm! I can't fault you on your reasoning where 'trust' is concerned! However, this is not just about trust! If it were the Banks and Storm's directors wouldn't be in the dock. Whenever one employs a professional one trusts that that person is qualified/experienced enough to give sound advice. That's just the way it is! There is nothing wrong with that!

However, this is about DECEPTIVE AND MISLEADING CONDUCT!

Let me repeat this once again because the message is still not getting through to some on this forum. This is about deceptive and misleading conduct! It is not about the mindset of those that invested in Storm. If people want to make themselves feel better by believing it couldn't happen to then because they are far too astute, well good luck to them! They'll find however that there were many Storm investors with a background in business and IQ's far above theirs that were taken in by all this.

The truth of the matter is that anyone can be duped if they are presented by someone with sound credentials with something that seems creditable, but used misleading and deceptive conduct in so doing! If other financial advisers that were asked to view Storm's plan couldn't see its flaws (a financial planner from Westpac who was asked by us to come up with something better saw our Storm proposal before we signed with Storm) how the heck can so called financial experts on this forum now claim that it was easy to see through it. Quite frankly,they are up themselves.

Oh, and by the way, here are some definitions for you:

'DECEIVE'
v. de·ceived, de·ceiv·ing, de·ceives
v.tr.
1. To cause to believe what is not true; mislead.
2. Archaic To catch by guile; ensnare.
v.intr.
1. To practice deceit.
2. To give a false impression: appearances can deceive.

'Misleading' which equates in this case with fraud

'FRAUD' (Legal)
A false representation of a matter of fact””whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed””that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury.

Nice to hear from you. Keep the comments coming because we need more input. My steam was not directed at you by the way!

 

[Julia]

If other financial advisers that were asked to view Storm's plan couldn't see its flaws (a financial planner from Westpac who was asked by us to come up with something better saw our Storm proposal before we signed with Storm) how the heck can so called financial experts on this forum now claim that it was easy to see through it. Quite frankly,they are up themselves.

On the contrary, so called financial planners offered by the banks are simply salespeople put there to sell the bank's products. I've met a few of them over the years and wondered how on earth they can be in such a position. They have known nothing of long term wealth creation strategies and just look blank when asked to discuss anything other than their bank's products.

So maybe refrain from suggesting anyone finding it obvious that you were offered a high risk strategy is 'up themselves'.

Frank, if you want to reply to someone's particular post, such as that from "Reasons" if you click on the "Reply with Quote" icon you'll get their post up in italics. The way you're attempting to do it, it looks as though the entire post has come from you.

 

[pilots]

YOU ARE TOTALLY INCORRECT AND YOU DO KNOW WHAT YOU ARE TALKING ABOUT. YOU ARE SHOOTING OFF YOUR MOUTH WITHOUT ANY KNOWLEDGE!

Well friend, we know of a bank employe who WAS getting a kick back from Storm.

 

[Julia]

It might be wise not to count too much on ASIC achieving a result for Storm clients.
After much publicity and assurances Eddie Groves would be in a heap of trouble over the collapse of ABC Learning, apparently ASIC have backed right off.
http://www.businessspectator.com.au...ent=101920&utm_campaign=kgb&modapt=commentary

 

[Ijustnewit]

As it now seems that according to this forum we can no longer trust any Professional as they are just salesman , I have taken to doing my own electrical , plumbing , tested my own eyes and whipped up some specs . Today I found a bargain on a drill and some bits at Bunnings , so the quote and advice I got from my Dentist will soon be a thing of the past. Does anyone have some advice about a Boeing 737 as I'm travelling to Melbourne for business next week and flying one of those things can't be that hard, can it ?:1zhelp:

 

[Judd]

A bit unfair there, pilots. Maybe true in one case but it does not necessarily apply to all.

jjtebj12, says he/she consulted bank managers and an accountant. Would have done so in all good faith. And it could be the case that the bank managers and accountant, also in good faith, gave their respective views on the proposal by Storm Financial.

Only one small potential problem. And that would occur if neither the bank managers or the accountant had any authority to give financial planning advice. Bank manager advise on the banks deposit and lending products but for financial advice go and see a planner. Accountant the numbers go here and this bit is tax deductible but for financial advice go and see a planner. No “know your client”, no Statement of Advice as per Storm Financial.

However, why would jjtebj12 actually know the ins and outs of that? I need opinion. Oh, I know, I'll talk to a bank manager and the accountant as they know about finances.

Oh dear, all the rules and regulatory structures that have been introduced by Governments in the past to protect the consumer have just been rendered ineffective because the poor downtrodden consumer is not fully aware of those ins and outs. The game shifted years ago but I suspect that the public is not really aware of the shift.

 

[ASICK]

I wonder how much notice the defendants in the court action take in this forum. Perhaps little, but I could just imagine peering eyes looking in from time to time.

 

[jjtebj12]

A bit unfair there, pilots. Maybe true in one case but it does not necessarily apply to all.

jjtebj12, says he/she consulted bank managers and an accountant. Would have done so in all good faith. And it could be the case that the bank managers and accountant, also in good faith, gave their respective views on the proposal by Storm Financial.

Only one small potential problem. And that would occur if neither the bank managers or the accountant had any authority to give financial planning advice. Bank manager advise on the banks deposit and lending products but for financial advice go and see a planner. Accountant the numbers go here and this bit is tax deductible but for financial advice go and see a planner. No “know your client”, no Statement of Advice as per Storm Financial.

However, why would jjtebj12 actually know the ins and outs of that? I need opinion. Oh, I know, I'll talk to a bank manager and the accountant as they know about finances.

Oh dear, all the rules and regulatory structures that have been introduced by Governments in the past to protect the consumer have just been rendered ineffective because the poor downtrodden consumer is not fully aware of those ins and outs. The game shifted years ago but I suspect that the public is not really aware of the shift.

The bank passed on all the Storm information to their internal department (I'll have to check the department name as it's been so long). Admitting after the collapse that their advice was incorrect, hence quiet settlement. As for my accountant, inside his large firm they do have qualified financial advisers who also got it wrong. Banks and larger accountancy firms offer a broad range of services these days - but accordingly to you we shouldn't seek their services.