Storm Financial Group

[Harleyquin]

The Four Corners program on cba, highlighted the tip of the iceberg into corruption. It may not have been the cba that is the problem, but those employees within the bank prepared to do so much that wasn't right. I don't understand how they could get away with this. Their actions allowed storm to do what they did to their clients. We thought we were getting a genuine financial plan. It is only when storm collapsed that we were being told that it was too good to be true. That hurt because I though that we were doing the right thing taking for financial advice, I had no idea that it was too good to be true. Obviously we were hoping to get ahead financially by seeking advice, but "too good to be true" no that was never the case.

 

[Garpal Gumnut]

The Four Corners program on cba, highlighted the tip of the iceberg into corruption. It may not have been the cba that is the problem, but those employees within the bank prepared to do so much that wasn't right. I don't understand how they could get away with this. Their actions allowed storm to do what they did to their clients. We thought we were getting a genuine financial plan. It is only when storm collapsed that we were being told that it was too good to be true. That hurt because I though that we were doing the right thing taking for financial advice, I had no idea that it was too good to be true. Obviously we were hoping to get ahead financially by seeking advice, but "too good to be true" no that was never the case.

Excellent comments HQ.

I have before advocated that Financial Management should be a core subject at school from Y1 to Y12.

Investment is a zero sum game, one wins as a consequence of another's loss, unless expansion occurs in the economy.

Expansion usually stops when a bubble bursts as with the GFC, which destroyed Storm's model of "no losers".

gg

 

[bunyip]

Anyone see Jordan Belfort, aka ‘the Wolf Of Wall St’, interviewed on ‘60 Minutes’ a couple of week ago?

Belfort set up a stock brokerage company in the US that cold called thousands of wealthy investors every day to give them a sales pitch about penny stocks that supposedly had enormous upside potential that was about to be realized.
So good was the sales pitch that many investors gave the go ahead on the spot for staggering amounts of these stocks to be purchased on their behalf. His brokerage firm made huge commissions on these transactions.
No questioning of the advice being given, no research into the stocks – Belfort and his brokers said the stocks were a great buy, so the gullible investors bought up big.
One character blew 250 grand on one stock alone without even bothering to check into what he was buying.
At the height of his ‘success’, the unscrupulous Belfort made almost a million dollars a week over a 12 month period.
The law caught up with him eventually and put him in prison where he belonged.

Yesterday I got cold called by someone with a foreign accent telling me that I should buy gold. I hung up on him shortly after he began his sales pitch.

A few years ago a backhoe operator who was doing a job for me asked me if I knew of such and such a company. I told him I’d never heard of it, what did they do? He said he’d never heard of it either, didn’t know what the company did, but he’d just sunk six grand into it.
In answer to my query as to why he’d invest in a company he’d never heard of, he said he’d been cold called at three in the morning by a foreign accent telling him what a great investment this stock was. So he took a punt and invested six grand.
Of course his money is gone – he can’t even find any record of the company having ever existed.

Moral of the story.....look into investments carefully before spending your money, otherwise run the risk of falling victim to the next Jordan Belfort, Storm Financial, or someone else who will happily line their pockets at your expense.
Unscrupulous people are everywhere, but you don’t need to fall victim to them if only you think things through carefully before you act.

 

[Frank Ainslie]

Excellent comments HQ.

I have before advocated that Financial Management should be a core subject at school from Y1 to Y12.

Investment is a zero sum game, one wins as a consequence of another's loss, unless expansion occurs in the economy.

Expansion usually stops when a bubble bursts as with the GFC, which destroyed Storm's model of "no losers".

gg

Hi All,

It's been along time between drinks!

Gumnut! It's not about educating financial advisers or would be investors. It's about putting in place a set of rules that financial advisers must follow. The penalties for not doing so must be severe enough to make them think twice before deceiving people. Of course, this is a pipe dream because the powers that be don't want to fix the problems in the financial sector Think about it for a moment. A whole new industry has grown up out of other people's misery. Lawyers, for instance, are having a field day because the abuse is growing rather than abating. Read THE AUSTRALIAN if you don’t believe me.

I am currently writing a book called, 'THEY PRACTISE TO DECEIVE' which is not so much about Storm Financial or us for that matter, but rather about what happened to us afterwards. The ‘aftermath’, so to speak!

In my book everyone gets a mention; Storm, the Banks, ASIC, the Judiciary, the lawyers, the Government, the Media etc. My book is aimed at the general public in Australia who need to be informed about the hidden dangers that exist in the financial sector, and the lack of protections that still exists today for the unwary.

We, the people that lost our money in Storm, will never get it back. So be it! However, if I can stop others from placing their trust in an industry that cannot be trusted, then the experience will have been worth it.

This Government and ASIC will never do anything about fixing the financial sector until people wake up to themselves and stop investing. I hope that my book will make them do just that.

What's that old saying, 'The truth will set you free!' Well it's time the people of Australia learnt about the weak-kneed approach this government and ASIC has to the wrongdoers. Band aid solutions to the problems that are inherent in the financial sector are not the answer.

Public perception is everything. For those in the financial sector, there's a STORM coming your way now. Let's see how you cope with it?

Every politician, media outlet, bank CEO, ASIC, social media platform, (this forum ) etc will be sent a copy.

Yes, this is 'payback' time. If I can cause the same misery to the financial sector, and the people that control this area, that they have caused to the people that placed their trust in Storm , I will die a happy man.

“Bitter and twisted? You betcha!” Since we invested using Storm, we have been lied to and deceived not only be Storm but by everyone else as well. If I had a sword, I would have dispatched a few of these miscreants long before now. Since I do not, a pen will have to suffice. I’m told it’s mightier than the sword anyway.

 

[Julia]

This Government and ASIC will never do anything about fixing the financial sector until people wake up to themselves and stop investing. I hope that my book will make them do just that.

You seem to miss the reality that hundreds of thousands of people, millions in fact, have been successfully investing for much of their adult lives. They are the ones who have taken the steps to become financially literate and have no need of advisers.

Good luck with the book. And even more good luck if you think any book will upend the financial services industry.

 

[Knobby22]

Frank

It was "The Age' that outed CBA for their dodgy practises.
As a result CBA will no longer advertise with any Fairfax radio station or paper.
You can see why The Australian prefer to cuddle up.

 

[Judd]

I am currently writing a book called, 'THEY PRACTISE TO DECEIVE'...........

I look forward to coming across it while browsing through the remainders bin.

 

[bunyip]

It's not about educating financial advisers or would be investors. It's about putting in place a set of rules that financial advisers must follow. The penalties for not doing so must be severe enough to make them think twice before deceiving people.

You're dreaming if you think we can entirely fix up the financial planning industry and eliminate the crooks simply by increasing penalties and introducing new regulations. Rules and regulations and severe penalties for offenders haven’t stopped corruption or incompetence or dodgy practices among unions, police, politicians, doctors, the building industry, and all manner of other industries.
I’m not saying that improvements can’t be made. But unless investors carefully evaluate the advice they’re given, there will still be people who’ll get caught by the odd shonky planner.

We, the people that lost our money in Storm, will never get it back.

And nor should you. If you punt your money on an extremely risky investment, mortgage your home to borrow more money to punt on the same risky investment, then use double gearing to borrow even more money which once again you punt on this risky investment.....then there’s no way in the world that you should be entitled to get your money back if if the market crashes and you lose everything.
Nobody forced you to take the risk, Storm informed you in their statement of advice that the stock market is a risky investment. The bank you dealt with was your financier, not your financial adviser.
If you think you should be entitled to get your money back, then who exactly do you think should have to give it back to you?

Public perception is everything. For those in the financial sector, there's a STORM coming your way now. Let's see how you cope with it?

Ah yes....you’ve been hoping for and predicting dire outcomes for the financial planning industry for quite some time now. And yet financial planners across the board have reported a significant increase in business since the 2008 financial crash.
Your hate campaign against financial planners will be viewed with amusement by many. It will take a lot more to bring down the financial planning industry than a vindictive book written by a disgruntled investor who was largely the architect of his own problems.

Yes, this is 'payback' time. If I can cause the same misery to the financial sector, and the people that control this area, that they have caused to the people that placed their trust in Storm , I will die a happy man.

You’ll die a happy man? I doubt it. I think it’s more likely that you’ll die a bitter, resentful, twisted old man because you’ll spend the rest of your life ranting and raving about the perceived injustices of the system, rather than having enough character to face the fact that you are largely responsible for the decisions you made, and the outcomes of those decisions.

 

[basilio]

Bunyip I think you are being really rough on Frank.

I suggest there are very real concerns about the quality of advice given by Financial Advisors. Many people on this forum have offered their own experiences on just how questionable or down right deceitful the industry has been in their experience.

The Storm experience is one particular example. But even as that is unpacked we can see just how culpable the CBA has been with it's treatment of people via it's financial planners.

On a personal level I have seen a number of friends very badly advised through the financial planning industry.

I have a lot of respect for Frank to being prepared to fight and keep fighting on behalf of the thousands of people who have been misled or just plain ripped off by financial planners. You certainly have to be a bit of a fanatic to keep going when "commonsense" or external pressure is brought to bear to back off. In the end however I hope that his book does pull together not only his experiences but the work of other people who have also been campaigning to clean up the industry. (You there Frank ?) I suggest there is value in a collaborative approach that brings a number of voices to the table and exposes this industry in ways that finally do force action. Journalist like Michael West for example and there is a woman in West Australia who has been hammering for years on the issue.

I do not think the average Joe is really able to ask the type of questions that will bring a dodgy planner to account. The industry is based on getting people to sign over their money. They are very good at it.

Cheers.

 

[bunyip]

Bunyip I think you are being really rough on Frank.

Yes, it can be rough on a person to be confronted with unpalatable truths that he’s in denial about. But that shouldn’t stop honest and fair-minded people from speaking out.

I suggest there are very real concerns about the quality of advice given by Financial Advisors. Many people on this forum have offered their own experiences on just how questionable or down right deceitful the industry has been in their experience.

Of course there are concerns about some of the advice being given. But I object to one embittered old man trying to blacklist the entire financial services industry because he got done over by a shonk.
One bad apple doesn’t mean the entire case of apples is bad.
While you and Frank and others were getting the wool pulled over your eyes by one greedy operator, thousands of other investors were getting good advice from their financial planners.
In one of the few honest and realistic posts that Frank has sent to this forum, he admitted he lost everything because he didn’t have enough common sense to check out a number of financial advisers and compare their advice, rather than consulting just one firm and blindly believing everything they told him.

I have no objection to making changes for the better. But I still maintain that the best protection for investors is to get some basic investment education that’s freely available (a suggestion which Frank scoffs at, incidentally), to use a bit of common sense by comparing a number of planners, then evaluating their advice to the best of your ability before proceeding.
Better regulations could help, but are no guarantee against investors getting dudded. They need to have some basic knowledge and they need to employ a fair measure of common sense.

The Storm experience is one particular example. But even as that is unpacked we can see just how culpable the CBA has been with it's treatment of people via it's financial planners.

Yes, that’s a bad business and the CBA must be held accountable for the poor advice they gave. But that’s a separate issue to the Storm debacle where CBA was the financier, not the financial adviser. It was Storm who gave the advice – it’s Storm who should have been sued. But of course there was no point is suing someone who was incapable of paying compensation anyway. So you Storm investors decided to target the banks because they have deep pockets and therefore the capacity to pay.
Whether or not they were the cause of your losses was apparently of no importance. You were just on a money grab from whoever you thought you could get money out of. Hell, at one time a bunch of Storm investors even petitioned the government to use taxpayers money to refund the losses of Stormers. Again, it was apparently irrelevant that Aussie taxpayers hadn’t caused your losses. Money grabbers will grab money from anyone they can, and to hell with fairness.
Tell me, Basilio, if I borrowed a grand from you to put on a ‘sure thing’ in Race 4 at Flemington, and my sure thing came home in last place, would you understand if I told you the loss wasn’t mine, it was yours because it was you who lent me the money?
Of course you wouldn’t. You’d tell me the loss was mine because it was me who took a punt.
Why then should your financers, the banks, have been expected to make good the losses of a group of people who took a punt on the stockmarket. It’s nonsensical to even suggest it.

I have a lot of respect for Frank to being prepared to fight and keep fighting on behalf of the thousands of people who have been misled or just plain ripped off by financial planners.

OK. And do you have a lot of respect for someone who admits he’s so bitter and twisted that he wants to cause misery to the financial sector, despite the fact that it was only one bad apple in the financial sector that led him astray. And despite the fact that many thousands of people have had good service from financial planning firms.
Do you have a ‘lot of respect’ for a man who scoffs at suggestions that basic financial literacy which can be taught in schools could go a long way towards empowering people to make a reasonable evaluation of any financial advice they’re given. Or better still, empower them to make their own investment decisions like so many successful investors are doing.

I do not think the average Joe is really able to ask the type of questions that will bring a dodgy planner to account.

And yet we have people who oppose the suggestion that basic investment and financial education should be taught in schools so as to better equip people to ask questions of financial planners, and evaluate the advice they give.

For years I’ve been hearing people claim that Storm investors couldn’t possibly have seen the pitfalls in the Storm model. To these people I say.......
Was the average Joe, prior to investing through Storm, able to look at the 1987 market crash that happened only 20 years earlier, and ask him/herself how a similar crash would affect him if he went ahead and followed Storm’s advice?
Do you think the average Joe is able understand that the volatility of the stockmarket gives you potential for both profits and losses, and that profit and loss potential is greatly magnified if you borrow a load of money to invest in the market?
Do you think the average Joe was able to watch a TV news program once a day and heed the dire warnings of an impending financial crash that were given in every media outlet every day for at least a year before the crash happened?
Do you think the average Joe was able to read Storm’s statement of advice and take note that Storm described the stockmarket as a risky investment?
Do you think it was within the mental capacity of the average Joe to see the obvious contradiction in Storm advising people to get their hands on every available dollar by cashing out super and assets, mortgaging homes and borrowing to the hilt, double gearing, and then shoving all that money into an investment which Storm themselves had already described as risky?

I say it’s well within the mental capacity of the average Joe to do all of the above, if only they bother to think things through and use a modicum of common sense. Teach some basic investment education in schools so that people are even better equipped to deal with financial planners, or better still, can handle their own financial affairs like millions are already doing.

 

[Glen48]

At at present to become a financial adviser it is an 8 day course.
Day 1 would be a video preservation how so set up a web site and search for Merc's/Rollers to impress your victims.

 

[Julia]

At at present to become a financial adviser it is an 8 day course.
Day 1 would be a video preservation how so set up a web site and search for Merc's/Rollers to impress your victims.

8 days? Really? That sounds incredible. Are you saying they would come out of those 8 days properly qualified as financial advisers? Could you provide a link to this information?

 

[Julia]

This looks like it, Glen?

ASIC RG146 Diploma of Financial Planning

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Our Diploma of Financial Planning provides ASIC RG146 compliance is all key financial products. Completing our course provides RG146 compliance in these financial products

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Ask about IBI Priority Pathways Program?

Is there some sort of qualifier over this or is it really correct that someone knowing nothing can - in eight days - be legally eligible to advise people on how to invest their money???
Just can't believe that it can be so.

 

[basilio]

Lots of heat in this discussion isn't there ?

Bunyip you dissected my overall support for Franks tenacity in much detail. As I read it you believe that "the average Joe" really should be able to make a better judgment call on Financial advisors if they simply use their own judgement.

You also (I think) have some sort of excuse for CBA in the sense that the Storm investors only went after the bank because they had deeper pockets than the principals of Storm.

I disagree with a basic premise of your statement - that there are only a few bad apples in the Financial planning system and that overall thousands of planners are giving people good advice. It's my view that in fact there are only a relatively few quality independent Financial Planners and that the majority of the people in the industry are glorified and reinvented Insurance salesmen.

Why do I think this ?

1) Choice magazine has spent 20 years campaigning against the vested interest structure of the current financial planning industry. Check out the reference and see just how conflicted the advice given to people actually is.

2) I have had a number of friends who have been given advice and I know a few Financial planners. Interestingly enough the few independent planners I know struggle to make a living. They are simply swamped by a sea of salesmen who are employed by the big funds to keep their products being sold.

3) The fact that one can be a Financial planner in an 8 day course should sound extreme warning bells.

4) I read the description of how the CBA allowed/encouraged it's best (most profitable) planners to sell products in whatever way necessary to keep the funds afloat - just before they crashed. It was a horrific story that resulted in many people losing their life savings unnecessarily

5) Finally and most significantly. I have watched for many years the regular emergence of totally dodgy investments in the agricultural and building areas. These were areas of real damage where Financial planners were partners in directing clients into quite dangerous investments based on the 5-8 10% commission they were receiving. Now if the industry had the remotest respect for it's clients and the ethics of its advice they would have taken action to expose these shonks and refused to promote them. Never did, never would, totally corrupted.

If you want clear and honest advice Bunyip take on board the following thoughts.

The Financial planning industry in Australia is the creature of the industry and it's employees. There is no commitment to clients beyond ensuring they are clipped as ruthlessly as possible. As a consequence of that the customers are essentially overcharged at every point and if they actually obtain some financial return it is despite rather than because of these services.

http://www.choice.com.au/reviews-an...cial-advice/page/20 years of campaigning.aspx

 

[basilio]

Couldn't resist adding adding this comment from another Forum member re Financial planners

My ex-Financial Advisor sold nothing but MLC Products. They were so successful that they were able to cull their least profitable clients i.e. clients with low balances in MLC. At the time I was upset at being rejected but it was a blessing in disguise. I removed the other advisor they recommended and stopped their trailing commissions. Then I learned one or two things about Super and switched my low balance to an Industry Fund. Had I not being culled, I would have foolishly believed that my advisor had my best interest at heart. It is a strange thing to thank GFC for reducing my balance so that I was not good enough to be part of my ex-Financial Advisor's client list.

(I currently receive no advice on my current Super but it has performed way better than my previous Super - with MUCH less fees. Pity I do not have enough to justify SMSF - not worth, rather keep a minimum in Super. This thread is influencing my decision
https://www.aussiestockforums.com/for...=24666&page=35
Actually this Forum has many things to rave about.)

Could I ever imagine my ex-Financial Advisor telling me that I earn a low income, making very small contributions to my Super and thus an Industry Fund is more suited than a Retail Fund?? Or when I want to put $5000 into an investment, he sold me another MLC product just 8 months prior to GFC. Actually it was my fault for being so gullible. :bang head:

I really should list my dumb naive mistake on this thread as one of the most dumbest, naive and gullible mistake I have made:
https://www.aussiestockforums.com/for...hlight=mistake

It reminded me that I have helped 3 different friends with financial advice/analysis over the years who were involved with MLC. Each incident opened my eyes to the costs, lack of return and bad value from their products.

 

[Iggy_Pop]

It is not just Australia, looking at this link

http://www.wealthdaily.com/articles/retirement-scams/5223?lloct=2

Retirement Scams
It's Legal Robbery


By Briton Ryle
Wednesday, June 25th, 2014
It's sickening how far Wall Street will go to line its pockets with the money of unsuspecting Americans. I would call this latest revelation a scandal, except it's hardly making headlines ”” even though it involves fraud. The story involves rolling over 401(k) accounts into IRAs.
As a long-term income/dividend investor, I love IRA accounts, especially the Roth variety. They are powerful tools that allow the individual investor to avoid taxes as they invest for retirement.
And Wall Street has found a way to pervert them for its own gain.
You probably know that when you change jobs or retire, you have the option to roll your 401(k) account into an IRA. It's usually a good idea because you can get your money into an account that avoids certain taxes and also offers you a much better assortment of investment choices.
For instance, most 401(k) plans only offer you mutual and index funds, while you can buy individual stocks in IRA accounts.
But you can also gain access to a lot of non-stock investments that may have higher fees and not be as easy to buy or sell.
This is where the problems start. Bloomberg recently told the story of a few people who rolled their 401(k) accounts into managed IRAs and got totally shafted.
One such investor, Manuel Gonzalez Martinez, put his $150,000 nest egg in Puerto Rican municipal bonds on the advice of his broker. These bonds had a 3% upfront sales fee and annual fees of 1% a year.
In one year, that's $6,000 in fees. Outrageous. And it gets worse.
Puerto Rico's economy tanked after the financial crisis. Now those bonds are worth only $90,000. Throw in all the fees, and Manuel's retirement savings have been devastated by more than $50,000 in losses.
Know Your Investments: Non-Traded REITs
Another investor, Maria Lew, watched her IRA account balance fall from $390,000 to $100,000 after some of her money was put into non-traded REITs.
I love REITs as a dividend investment. And my Wealth Advisory income newsletter has seen some excellent returns from top-quality REITs. But you should know that even though they may sound similar, there are some big differences between a regular REIT and a non-traded REIT.
A non-traded REIT is a real estate investment trust (REIT) that doesn't trade on a stock exchange like the New York Stock Exchange or the Nasdaq. Because of this, it can be very hard to sell your shares when the price starts dropping.
Not only that, but non-traded REITs can carry a huge 10% commission right off the top. Of that, 7% goes to the broker that recommends them.
Also, non-traded REITs don't have to report estimated per-share value until 18 months after they are done raising funds. The fund raising might take two or three years. In other words, it could be years before an investor in a non-traded REIT has any idea what the REIT is actually worth.
How is this even legal?
If you ever have a broker suggest a non-traded REIT to you, you can be pretty sure he or she is ripping you off.
In 2013, broker-dealers sold $20 billion in non-traded REITs. That's $1.4 billion in commissions that came out of some people's retirement savings and went right into brokers' pockets. I'd call it a $1.4 billion rip-off.
Legal Robbery
Bloomberg also told the story of how nine investors lost over $1 million after rolling over their 401(k) plans. This time, their broker put their retirement savings into highly risky ventures like oil and gas private placements.
Another popular retirement scam to separate individual retirement investors from their money is variable annuities.
Now, many retirees understand that an annuity provides insured income. A variable annuity preys on the perception of the safety in a regular annuity, and at the same time, it offers upside potential. A variable annuity invests like a mutual fund, so your income is variable as to whether the stocks go up or down.
The insurance component of the variable annuity usually assures you that you'll receive at least your principle back if you die ”” but that may be it. The problem with variable annuities is fees. There's a 7%-8% up-front commission, and annual fees can run 3% a year. Plus, the insurance component can take another 1% a year.
Variable annuities exist to generate fees for the broker and the sponsor company.
Non-traded REITs, Puerto Rican muni bonds, oil and gas private placements, variable annuities ”” none of these investments has any business being in your retirement account. They are all much more risky than they sound and carry high fees and even commissions to the broker that sells them to you.
So why are they pushed so hard on unsuspecting investors? It's mainly because, from a legal perspective, the broker is not held to a fiduciary standard ”” that is, his is not required to put his clients' interest above his own.
Normally, if you have money in a trust, for instance, the trustee is required by law to uphold his or her fiduciary duty ”” to put your interest above his or her own. Brokers aren't held to that reasonable standard.
Surprised? Well, brokers are only required to sell products that are suitable for clients. The standard for what is suitable seems to be whether they can afford the particular investment product ”” and the fees and commissions.

In 2010, the Dodd-Frank financial regulation law gave the SEC the authority to propose a rule requiring brokers to act as fiduciaries. The SEC has done nothing.
The Department of Labor, which oversees retirement plans, has yet to act on the fiduciary issue, either. It was supposed to have a proposal out in August, but it recently pushed the date to January 2015. The Labor Department had already proposed a fiduciary standard in 2010 but then withdrew it in 2012 after Wall Street protested.
The Securities Industry and Financial Markets Association (SIFMA) is one of the financial industry's main groups working against a fiduciary rule for brokers.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, said: “From day one, [the fiduciary rule proposal] has been a troubled proposal by DOL that will harm the ability of everyday American investors and small business owners to save for retirement.”
The Insured Retirement Institute (IRI) is another.
IRI President and CEO Cathy Weatherford said, “IRI continues to be concerned that a forthcoming [fiduciary] rule proposal from the DOL could have unintended consequences that would ultimately deprive lower and middle-income Americans from accessing affordable retirement planning services and advice.”
Wall Street is spending millions lobbying Congress to kill this fiduciary rule. Their message is clear: American investors need to be gouged by unscrupulous brokers in order to save for retirement.
My message should be clear too: be aware that Wall Street is targeting your retirement savings. Be aware that they want to trap you in bad investments with high fees and commissions.
And be aware that it is perfectly legal for them to do so.
Until next time,

 

[Julia]

I think, fwiw, that basilio and bunyip are both right.

The self interested actions of the financial services industry are what they are. The government seems little interested in improving this and even the most stringent rules will not preclude clever salespeople taking advantage of ignorant clients. Mostly they are not acting illegally. Even the approach of Storm of the double gearing was quite legal and indeed would have made clients very, very happy whilst the market was rising.

So, rather than railing against the miserable unfairness of it all, the pragmatic approach would surely seem to be to acquire enough financial literacy to be able to call these so called planners on their dodgy approaches if this occurs.
Even if you decline to take full control of your own finances, at least educate yourself enough to know when you're being used. Some of the Storm clients said they just didn't understand what they were becoming involved in.
Never, ever invest in anything you do not understand.
Always believe that you will yourself have your own interests at heart in a way that no 'expert' will.

 

[cynic]

I think, fwiw, that basilio and bunyip are both right...

+1

...I am currently writing a book called, 'THEY PRACTISE TO DECEIVE' which is not so much about Storm Financial or us for that matter, but rather about what happened to us afterwards. The ‘aftermath’, so to speak!

In my book everyone gets a mention; Storm, the Banks, ASIC, the Judiciary, the lawyers, the Government, the Media etc. My book is aimed at the general public in Australia who need to be informed about the hidden dangers that exist in the financial sector, and the lack of protections that still exists today for the unwary.

We, the people that lost our money in Storm, will never get it back. So be it! However, if I can stop others from placing their trust in an industry that cannot be trusted, then the experience will have been worth it.

This Government and ASIC will never do anything about fixing the financial sector until people wake up to themselves and stop investing. I hope that my book will make them do just that.

What's that old saying, 'The truth will set you free!' Well it's time the people of Australia learnt about the weak-kneed approach this government and ASIC has to the wrongdoers. Band aid solutions to the problems that are inherent in the financial sector are not the answer.

Public perception is everything. For those in the financial sector, there's a STORM coming your way now. Let's see how you cope with it?

Every politician, media outlet, bank CEO, ASIC, social media platform, (this forum ) etc will be sent a copy.

Yes, this is 'payback' time. If I can cause the same misery to the financial sector, and the people that control this area, that they have caused to the people that placed their trust in Storm , I will die a happy man.

“Bitter and twisted? You betcha!” Since we invested using Storm, we have been lied to and deceived not only be Storm but by everyone else as well. If I had a sword, I would have dispatched a few of these miscreants long before now. Since I do not, a pen will have to suffice. I’m told it’s mightier than the sword anyway.

There are those that share some of your opinions. However, I do wonder about the efficacy (or lack thereof) of your approach to this matter.

What do you believe yourself capable of expressing with your mighty pen strokes that hasn't already been expressed many times before?

How receptive do you think those, like you once were, will be to your warnings?

Do you truly believe that Frank "Past" would have paid the slightest bit of attention to any of the warnings issued by Frank "Present"?

 

[bunyip]

Lots of heat in this discussion isn't there ?

Not really...I think the discussion has proceeded in a calm and reasonable manner so far. There’s no reason it can’t continue calmly and reasonably as long as nobody resorts to the ranting and raving and name-calling that has marred this thread in the past.

Bunyip you dissected my overall support for Franks tenacity in much detail. As I read it you believe that "the average Joe" really should be able to make a better judgment call on Financial advisors if they simply use their own judgement.

I believe the average Joe who invested through Storm could have made a far better judgment call if they’d followed the common sense guidelines I outlined in my previous post. And I believe it was well within the ability of every one of them to do so.
I also believe that some basic finance and investment knowledge is a powerful ally for any investor regardless of whether they handle their own affairs or use a financial advisor/planner.
Think of it this way - if I have some basic mechanical knowledge and you have none at all, am I better equipped than you when it comes to assessing the advice a mechanic gives me about my car? Of course I am.
Mechanical knowledge doesn’t come easy, but finance and investment knowledge does. They’re available free to anyone who wishes to avail themselves of the opportunity to learn. At the very most you might want to invest in a couple of thirty dollar books.
If the basics of finance and investment were taught in schools, then so much the better.

You also (I think) have some sort of excuse for CBA in the sense that the Storm investors only went after the bank because they had deeper pockets than the principals of Storm.

I make no excuses for any bank. I simply attempt to speak truthfully in saying that the banks were your financiers, not your financial advisers, and are therefore not the primary cause of what happened to Storm investors.
Believe me, I’m no fan of banks. They’re greedy bastards at the very least, and often incompetent as well. But they cannot and should not be blamed for your losses which were caused by a combination of dodgy advice from Storm, acceptance and application of that advice by Storm investors, and a meltdown in the stock market.

I disagree with a basic premise of your statement - that there are only a few bad apples in the Financial planning system and that overall thousands of planners are giving people good advice. It's my view that in fact there are only a relatively few quality independent Financial Planners and that the majority of the people in the industry are glorified and reinvented Insurance salesmen.

I made no claim that there are ‘only a few bad apples’ in the financial planning industry. On the contrary, I’ve spoken out in more than one post against the commission salesmen who masquerade as financial planners, but in reality are simply glorified salesmen who have a vested interest in putting you into the investment products that pay them the highest commissions.
I do, however, reiterate my view that Frank is not being reasonable in his stated objective of causing misery to the financial sector because he got poor advice from just one firm.
If he’d consulted a number of firms and compared their advice, he may have achieved a very different outcome.
Also, if the market had continued rising then Frank would have been wearing a smile as big as a carpark, and he would have had glowing praise for the very same advice which has so embittered him that he’s embarked on a personal vendetta to cause misery to the entire financial sector.

If you want clear and honest advice Bunyip take on board the following thoughts.

The Financial planning industry in Australia is the creature of the industry and it's employees. There is no commitment to clients beyond ensuring they are clipped as ruthlessly as possible. As a consequence of that the customers are essentially overcharged at every point and if they actually obtain some financial return it is despite rather than because of these services.

Thank you Basilio, for your ‘clear and honest’ advice.
And since you were one of the people who were caught by Storm Financial, whereas I was one of the people who avoided getting caught, then I think it’s only fitting that I reciprocate by giving you some ‘clear and honest’ advice of my own.

* By all means push for some changes to the financial advice industry if you think they can help. But be careful of over-regulating the financial industry to the extent that it becomes unworkable. Despite its imperfections, many investors are doing very nicely in the current system. Over-regulation has stuffed up too many industries already.

* Don’t kid yourself that rules and regulations and penalties for offenders can ever guarantee to eliminate incompetence and crooked operators. We have rules and regulations that supposedly govern the conduct of the police force, with stiff penalties for those who break them. And yet corruption has been endemic at the highest levels of the NSW police force in the years since former Queensland police commissioner Terry Lewis copped a 14 year jail sentence for corruption.

* Don’t underestimate the value of common sense and clear thinking when it comes to investing. You and I both know that Storm investors could have achieved a very different outcome if they’d used a modicum of common sense and clear thinking before signing on with Storm.

* Don’t underestimate the value of equipping yourself with basic finance and investment knowledge. And don’t overestimate the difficult of achieving it. It’s not at all difficult to learn the basics and it’s completely free.
Every intelligent person will see the benefit of making this education part of the school curriculum. Just an hour or two a week is all it would take to teach the basics.

 

[Hodgie]

Is there some sort of qualifier over this or is it really correct that someone knowing nothing can - in eight days - be legally eligible to advise people on how to invest their money???
Just can't believe that it can be so.

Its not correct. They estimate that it will take around 9 months to a year, 3 separate modules which they each give you 3 months to complete, however you can pay to extend the time period. The 8 days may be about showing up for in person workshops. If you know nothing your not going to pass any of the assessments. You need to get 70-80% on all of the exams to be considered competent.

I have the text books, there are thousands of pages of material to read. you have to complete an exam as well as an assignment for each module. So 6 assessments in total.

It probaly took me around 6-7 months (I cannot remember exactly). But I only got it as it was a work requirement to be RG146 compliant as part of a job I had at the time (and im not going to turn down education if work is paying for it!). I did not practise financial planning myself though (just audit them).

With the basic qualification it does not allow you to provide advice on just anything. There is also the advance diploma as well as specialists subjects which must be completed in addition to the basic diploma before you can cover all the areas. (direct equities, margin lending, SMSF are all examples of additional subjects)

On top of that, someone who gets the qualifications will need to then become a representative of a holder of an Australian Financial Services License. the AFSL holder should be doing their background checks on any potential persons who would represent their company and provide financial advice. If you have never provided financial advice to anyone before and merley have the qualification it is very unlikely that they will take you up as an authorised representative, you will have to first undergo a training period and learn how to deal with clients and how things work in the real world etc. If there is a dodgy planner, the compliance department of the AFSL needs to be tightened up!