Storm Financial Group

[SJG1974]

I'm all for people educating themselves, have harped on about it all through this thread, but to imply that all financial advisers are shonks is a bit unreasonable and unfair to those who genuinely have their clients' interests at heart. To assume they are all like Storm is not right.

Yep. Lets not confuse financial advice with the promise of riches by investing in a certain manner or in certain products.

Financial advice is much more that investing your money. Much much more. And good advisers will charge fee for service rather than a % of the money you give them to invest.

There is more to financial advice than the recommendation of investments....its about maximising the amount of capital you have to invest. It can be via gearing, if the investor is comfortable with the risk, it can be through structuring salary in a way to minimise tax and therefore increase disposable (investable) income. It can be via using the the legal tax haven which is our superannuation system to build wealth in a tax effective environment. It can be through owning assets in structures that enable the streaming of income and the protection of those assets against risk. It can be through structuring assets and income to maximise government benefits, to reduce the costs of aged care, to access benefits if you are sick or injured. Its not about getting rich in the shortest time possible.

How do i know? I use one who does all of the above. And i trust him 100%. And i choose all my investments in my SMSF myself. My relationship with my adviser has nothing to do with investment returns. Its about finding solutions to my financial problems, and educating me in the process.

We have seen how financially illeterate so many people are. Hell people have claimed they didn't understand that gearing into shares was risky. These people need help...how are they going to build the necessary wealth to live comfortably in retirement when all the facts and figures suggest that the 9% SG contributions employers make will be inadequate for most people to live a comfortable retirement? Answer, they wont.

So my advice...dont just avoid advisers because of places like Storm, who aren't advisers at all.

There are plenty of good ones out there who actually help people....you just have to look.

One last thing...i just hope the "advisers" at Storm and particularly Manny and Julie face their day of reckoning for the rubbish they peddled out to people under the guise of "financial advice".

 

[bunyip]

i just hope the "advisers" at Storm and particularly Manny and Julie face their day of reckoning for the rubbish they peddled out to people under the guise of "financial advice".

Me too, but those of us who would like to see these unscrupulous people doing serious jail time are likely to be disappointed.

A fake ‘Tahitian prince’, Joel Barlow, ripped off Queensland Health to the tune of 16.6 million dollars. He was sentenced to 14 years in jail, but will be eligible for parole in five years if he behaves himself in the slammer. (one news report said he’d be eligible for parole in just over two years)
Such is the very unfunny joke that is our legal system.

Now, the Storm people were dishonest and unscrupulous and greedy, they breached the code of conduct that financial planners are supposedly bound to, and a lot of people have been devastated by following their advice. But to the best of my knowledge there is no evidence that they actually stole anything.
So if Barlow will end up serving only five years in the pen for knocking off 16.6 million, what chance of Cassamatis or any of his associates doing jail time? I’d say it’s unlikely.

http://www.theaustralian.com.au/new...ueensland-health/story-e6frg6nf-1226600526411

 

[bunyip]

Anyone see ABC’s ‘7.30’ program tonight?

Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
Another bunch of gullible and trusting investors have done their dough.
Another failure on the part of ASIC to close him down before people got burnt.

Just like the Storm Financial mob, this character knew that the one sure way to reel people in is to tell them what they want to hear.

 

[Julia]

Anyone see ABC’s ‘7.30’ program tonight?

Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
Another bunch of gullible and trusting investors have done their dough.
Another failure on the part of ASIC to close him down before people got burnt.

Just like the Storm Financial mob, this character knew that the one sure way to reel people in is to tell them what they want to hear.

One of the sucked in investors said: "you just trusted him: you didn't have to think about it".
Oh my!

 

[buffet]

Anyone see ABC’s ‘7.30’ program tonight?

Another Storm-style spruiker has been uncovered – a bloke by the name of Peter Spann.
Another bunch of gullible and trusting investors have done their dough.
Another failure on the part of ASIC to close him down before people got burnt.

Just like the Storm Financial mob, this character knew that the one sure way to reel people in is to tell them what they want to hear.

Yes but isn't it funny all these guys look and sound the same and why are all scams and shisters out of the gold coast ???

 

[bunyip]

One of the sucked in investors said: "you just trusted him: you didn't have to think about it".
Oh my!

The mark of the master conman/salesman.....that a lot of people believed and trusted him without reserevation. Just as they did with Cassamatis.

Yes but isn't it funny all these guys look and sound the same and why are all scams and shisters out of the gold coast ???

Yes, the Gold Coast seems to have been a breeding ground for crooks and shysters for many decades.
Maybe it's an image thing....the way to appear successful is to live in the most expensive area of Queensland.

Somebody lent me a short Peter Spann video about 15 years ago.
It was of one of his free introductory seminars that was designed to dangle a carrot under your nose so you’d fork out several thousand dollars for one of his full on wealth creation seminars.
He told his story of how he went from having little money and a very ordinary job to multi-millionaire in quite a short time. He harped on about his fabulous lifestyle and his 300 thousand dollar Ferrari. His basic message was ‘You can do it too – just buy a ticket to one of my seminars and I’ll teach you how’.
The impression I immediately formed was that he knew little about investment and he’d made his money from selling seminars to people for thousands of dollars per ticket, not from astute investment decisions.

 

[Ijustnewit]

"Queensland beautiful one day full of scammer's the next "

 

[Ijustnewit]

ASIS's report into financial advice from 2010. Pages 13 and 14 may go some way giving an insight why certain groups/profiles seem to get caught up in these scams. The whole report makes an interesting read.

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rep224.pdf/$file/rep224.pdf

 

[bunyip]

"Queensland beautiful one day full of scammer's the next "

No no no, IJN, you’ve got it wrong.
Queensland is beautiful every day and full of scammers every day as well. I should know – I’m a born and bred Queenslander!

I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!

 

[pilots]

ASIS's report into financial advice from 2010. Pages 13 and 14 may go some way giving an insight why certain groups/profiles seem to get caught up in these scams. The whole report makes an interesting read.

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/rep224.pdf/$file/rep224.pdf

We know a sales man in the white goods, he will tell you look for the suckers, they are the best ones to make money from.

 

[Ijustnewit]

No no no, IJN, you’ve got it wrong.
Queensland is beautiful every day and full of scammers every day as well. I should know – I’m a born and bred Queenslander!

I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!

It's the great climate that attracts allot of retirees , ripe for the picking . I wonder if they have similar problems in places like Florida in the USA ?, I've seen TV programs where retirees from the UK are being scammed on the sunny shores of Spain as well.
As you have said financial education is the key , but it may take a few generations to get the message through.

Cheers
IJN

 

[Julia]

I could name you many other scammers who have operated or are currently operating here in Queensland. But I’d probably end up in court – so I’ll leave it to the media to sniff them out and publicly expose them – they’re far better than ASIC are at that sort of thing!

This was an interesting point raised in the item last night. ASIC offer the excuse that they are understaffed ad under funded. But, as Neil Jenman said, he can raise awareness of this latest con man, and the journalist could follow it up, coming up with obvious scamming, so why can't ASIC who presumably must have at least equivalent resources?

 

[bunyip]

This was an interesting point raised in the item last night. ASIC offer the excuse that they are understaffed ad under funded. But, as Neil Jenman said, he can raise awareness of this latest con man, and the journalist could follow it up, coming up with obvious scamming, so why can't ASIC who presumably must have at least equivalent resources?

Same story with the Federal police......it's become commonplace to see journos sniffing out crooks and corruption that the FP have missed.

It’s not like this Peter Spann character has only recently arrived on the scene – his wealth creation seminars have been run for at least the last 15 years, maybe longer. And he’s quite a high profile character who surely would have come to ASIC’s attention years ago.
I can’t really explain ASIC’s limited ability to sniff out these dodgy operators. Apparently ASIC themselves can’t offer any reasonable explanation either.

 

[Garpal Gumnut]

Anyone know anything about these guys. A few of my mates are clients. They are Townsville based . I don't use advisers.

gg

Same story with the Federal police......it's become commonplace to see journos sniffing out crooks and corruption that the FP have missed.

It’s not like this Peter Spann character has only recently arrived on the scene – his wealth creation seminars have been run for at least the last 15 years, maybe longer. And he’s quite a high profile character who surely would have come to ASIC’s attention years ago.
I can’t really explain ASIC’s limited ability to sniff out these dodgy operators. Apparently ASIC themselves can’t offer any reasonable explanation either.

I enclose the first post on this Storm thread and the last above.

I first researched Storm in October 2008, way before ASIC did.

I did it on a Commodore 64, which I still proudly own.

I cannot see how ASIC can be under resourced, they just have **** for brains, and sit on their arses doing bugger all, all day.

If I can suss out suss shows like Storm on a Commodore 64, I do not see why they cannot do more.

gg

 

[bunyip]

It's the great climate that attracts allot of retirees , ripe for the picking . I wonder if they have similar problems in places like Florida in the USA ?, I've seen TV programs where retirees from the UK are being scammed on the sunny shores of Spain as well.

I’ve bought a few eBooks on Forex trading over the years, fortunately didn’t outlay big dollars, only paid 60 to 100 bucks for them – a number of them came from outfits in Florida. So yes, Florida, like QLD, may well be a magnet for seedy operators.

As you have said financial education is the key , but it may take a few generations to get the message through.

Cheers
IJN

Yes, basic knowledge and education on finance and investment matters are our best safeguard against getting rolled by scammers.
And I’d add awareness and interest as being equally as important. To elaborate a little.....be interested in and aware of what’s going on in the world around you - read the papers, watch the news programs, learn from what’s happening around the globe, and store the information away for future reference.
If there’s a stockmarekt crash, file it away in your memory, don’t just forget about it like so many people had apparently forgotten about the ‘87 crash when they signed on with Storm. Tell your kids and grandkids about it so they don’t go charging blind into one of the many dodgy stockmarket investment schemes that we’ve seen in recent times, and will see again no matter what laws are put in place to close them down.
If you read about ASIC having endorsed some scheme that turned out to be a con, remember it – that way you know not to place too much faith in ASIC’s opinion, as many Stormers apparently did.

It’s really not all that difficult to get yourself some basic skills and awareness in investment matters. You don’t even have to pay for anything if you don’t want to – there are loads of good websites, ASX educational events, forums, and plenty of investment books that cost less than some people spend on booze in a week.
Once you start taking an interest in finance and investment matters, you’ll find yourself bumping into people who are more than happy to help out. The old saying is true....’Seek knowledge, and your teacher will appear’.

 

[Ijustnewit]

I enclose the first post on this Storm thread and the last above.

I first researched Storm in October 2008, way before ASIC did.

I did it on a Commodore 64, which I still proudly own.

I cannot see how ASIC can be under resourced, they just have **** for brains, and sit on their arses doing bugger all, all day.

If I can suss out suss shows like Storm on a Commodore 64, I do not see why they cannot do more.

gg

GG never throw that Commodore 64 away , they are highly collectable now and bring good money on E-bay.
Saw one recently on a trip to the Chapel Street Bazaar in Melbourne going for a nice roll of yellows.
Revenge of the nerds

 

[Defender]

This has been an interesting thread to follow, but I can't help thinking that there are some basic inconsistencies in the Storm story. There are other investment advisers who used a method like Storm, to promote double gearing into the share market (ie property loans used to purchase shares/funds, which is then used as equity for a margin loan). The interesting thing is that they did not all fail like Storm did.

I know of one firm who specialize in this method exclusively (AFAIK), and successfully managed their clients through the GFC. I know of another firm who also endorse this double gearing method, and still operate today. The former had trigger points to act on, in a falling market, and did so reducing client exposure in increments along the way. They are still operating under the same type of plan as Storm today. As far as I understand, none of their clients were margined out. What this tells me is that the Storm model was not basically flawed, as seems to be the conclusion the media and a lot of forum contributors believe. Storm failed their clients, because they went too far with their gearing, and did not implement a strategy to manage a falling market. To put all proponents of a Storm type model in the same basket, and accuse them all of being shonkies, when some of them have looked after their clients investments well, would be an injustice.

Just thought I'd put a bit of balance to the discussion, but don't think for a moment I condone Storm's actions, lack of actions and deals with banks, that their clients knew nothing about.

Storm promoted that they had a strategy in place, if the market went into decline. It seems quite possible that they did have a strategy (since other planners did), but chose not to use it. I don't pretend to know all the facts, but I do know the Cassimatis's were keen to publicly list Storm and some of their banking cohorts were supporting them. I think listing was their main goal, and they thought this was a big enough carrot for the banks to look after them.

The whole enquiry into Storm seemed to conclude that Storm's computer system could not provide accurate data on portfolio valuations...so was completely useless. To me this is total garbage! The funds tracked the major indicies, so a very good indication of clients positions could be easily assessed, at any moment in the day. Certainly, this would have been just just as useful as accurate data, when the market was falling quickly.

 

[bunyip]

This has been an interesting thread to follow, but I can't help thinking that there are some basic inconsistencies in the Storm story. There are other investment advisers who used a method like Storm, to promote double gearing into the share market (ie property loans used to purchase shares/funds, which is then used as equity for a margin loan). The interesting thing is that they did not all fail like Storm did.

I know of one firm who specialize in this method exclusively (AFAIK), and successfully managed their clients through the GFC. I know of another firm who also endorse this double gearing method, and still operate today. The former had trigger points to act on, in a falling market, and did so reducing client exposure in increments along the way. They are still operating under the same type of plan as Storm today. As far as I understand, none of their clients were margined out. What this tells me is that the Storm model was not basically flawed, as seems to be the conclusion the media and a lot of forum contributors believe. Storm failed their clients, because they went too far with their gearing, and did not implement a strategy to manage a falling market. To put all proponents of a Storm type model in the same basket, and accuse them all of being shonkies, when some of them have looked after their clients investments well, would be an injustice.

Just thought I'd put a bit of balance to the discussion, but don't think for a moment I condone Storm's actions, lack of actions and deals with banks, that their clients knew nothing about.

Storm promoted that they had a strategy in place, if the market went into decline. It seems quite possible that they did have a strategy (since other planners did), but chose not to use it.

As I see it, the success or failure of a double gearing strategy like Storm used is dependent on three main components....

1. The amount of gearing.
Storm’s strategy used ridiculous level of gearing, and kept revving up the gearing even further by the use of ‘steps’. I’ll take a guess that other firms using a similar strategy would have geared to more conservative levels – therefore less damage to their clients accounts when the market caved in.

2. The action taken once the market starts falling.
Storm took no action to lighten off client’s positions as the bear market set in. On the contrary, they kept gearing their clients further even when the market was in serous decline and dire economic warnings were plastered across the media every day.
Contrast this with the prudent action other firms took in lightening off their clients positions in increments as the market fell.

3. The size and the speed of the fall.
Trigger points sound good in theory, but they offer no defense against a situation where the market gaps downs severely from the closing price one day to the opening price next day.
1987 is good example – the crash was brutal right from the start, with the US market losing 22% on ‘Black Monday’ October 19, 1987. Next morning in response to the huge hit on the US market, our market opened 20% lower than the closing price of the previous day. By the end of the day it was down another 5%, making a total fall of 25% in a single day - the biggest one day fall in history in percentage terms.
By comparison the 2008 bear market saw a slow decline over about 18 months, except towards late 2008 when sheer panic sent it into free-fall.
Lightening off clients positions worked well enough in such a slowly declining market. It would have been a different story though if the sharp and sudden plunge of 1987 had ben repeated.

The whole enquiry into Storm seemed to conclude that Storm's computer system could not provide accurate data on portfolio valuations...so was completely useless. To me this is total garbage! The funds tracked the major indicies, so a very good indication of clients positions could be easily assessed, at any moment in the day. Certainly, this would have been just just as useful as accurate data, when the market was falling quickly.

And there was the scrambled bank data allegation used by Cassamatis to excuse his failure to manage his client’s portfolios. Some Storm clients agreed with him, I suspect in an attempt to gather ammunition to fire at the banks whose data was supposedly scrambled.
The reality was that the performance of the All Ords was mirrored by the index funds that Storm clients invested in, and the latest All Ordinaries figures are published and broadcast in the media several times a day. Therefore it was simple for Storm and their clients to know every day how their investments were performing.

 

[doobsy]

I know the group is much smaller but is there any additional information for investors that meet the criteria of being "class members" of the Levitts settlement agreement with MBL?

I know a few who did not sign up with Levitts but would meet the "member" status.

 

[Ralph80]

I know the group is much smaller but is there any additional information for investors that meet the criteria of being "class members" of the Levitts settlement agreement with MBL?

I know a few who did not sign up with Levitts but would meet the "member" status.

Take a look at the following from the ASIC website:-
https://storm.asic.gov.au/storm/sto...egarding-the-ASIC-CBA-settlement?opendocument

The way I read Point 18 the Macquarie settlement will include all investors, not just those in the Class Action. Any thoughts?