Storm Financial Group

numbercruncher said:

I wonder if we are supposed to show empathy to these people - its was just glorified gambling it seems .....

Bankruptcy must surely look tempting - how many working years do they have left I wonder ?

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I'm just concerned for those who really trusted the advice they were given and thought that it was this easy to be financially secure with this strategy.

I can only go on what I've read in the press but it seems that some didn't fully grasp the risks involved with double gearing. Some of those who followed the advice don't appear to me to be greedy but thought that this strategy would give them a modest sustainable income in their retirement.

I believe that Storm & their advisors would not deliberately set people up to fail, but I find it hard to fathom that Storm didn't have a mitigation strategy in place to insulate clients from large market downturns.

Maybe it will be up to the regulators & the courts to decide the eventual outcomes ?? .....

i had warned a number of people about storm financial. their system and fees were quite extreme.

people however much prefer to view potential upsides and ignore the downsides.

I believe any financial planning court cases will come down to is "Know your Client" "Know your Product" and I have already heard on the grape vine this has probably been breached in particular with retirees having huge loans and also little income(as seen on TV sob current affairs programs). Also in effect with how the index funds were managed, How well did the advisers know the products they were recommending/flogging. All of this is a Stat Law Level,

Another ground for action would be common law in regards to the "implied duty of care",

I feel real sorry for the clients here. There will only be two things come about from this
1)Greater PI premiums for the advice industry ( I dont think the insurer will be to happy about this)
2)A great impact on the Nth Queenland Community

All FP and Owners of business's never have assets in there own name so it would be basically useless going after any FP for cash, however maybe for pride.

Monario said:

I agree, I have no idea why they exist either. However if you pay good money, and a substantial amount of it to have them give advice and run your investment, and they partake in doing so, why then are they not there to serve you? I employed that person to do a job for me and they failed in that job. There must be some accountability for their actions.

I was not naive, and did, and do understand a lot about investing. But one thing I failed to mention was, I had a update meeting, while I was in margin call, and was told I was not, and that the investment was fine for the moment. Obviously many other things were discussed. But I can not disclose them on a public forum.

I like many other people, only found out about his when the bubble burst so to speak. And prior to, now believe I was been blatantly lied to.

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My understanding of "being in margin call" as far as the lender was concerned was entirely different if you were a Storm client as Storm had negotiated a larger percentage rate. For example if traditional rates were say 80% then we had up to 90% so if you were to go to the lenders website there would be an alert in our account details but it would not be relevant until we reached the negotiated range. And please also remember when Storm was trying to cash us up Challenger had frozen all accounts and only dribbled out the money. I am also concerned as to what is happening but aren't we all guessing at the true picture at the moment and all our minds are going a little crazy. I don't know if this is accurate but just maybe it is illegal for Storn Financial advisers to give us advice/information while there is an ASIC inquiry - I don't know I am just guessing but please just keep an open mind till we get some info one way or the other its like fighting windmills wouldn't it be better to save the angst when all the info is in front of us.

Storm has a lot to answer for. We knew we should have been in Margin call when the broadmarket hit 4000 points and even when we approached our advisor he insisted we weren't. And when we had a video link up with Emmanuel Cassimatis on Nov 28 he claims they had only found out an hour before our link up. After speaking to Colonial ML they insist Storm head office knew clients were in margin call on a daily basis and refused to notify us saying we would sit it out. Perhaps ego got in the way of common sense. We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago. Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.

Mash said:

Storm has a lot to answer for. We knew we should have been in Margin call when the broadmarket hit 4000 points and even when we approached our advisor he insisted we weren't. And when we had a video link up with Emmanuel Cassimatis on Nov 28 he claims they had only found out an hour before our link up. After speaking to Colonial ML they insist Storm head office knew clients were in margin call on a daily basis and refused to notify us saying we would sit it out. Perhaps ego got in the way of common sense. We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago. Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.

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I have been following this thread after I found it googling. I have a close friend that had about $1.7mill that has all now been lost, all he has now is a $350K interest only loan over his house and is trying to get a another job after 'retiring' at 50.

He and his wife are still in a state of denial and think that Storm will somehow save them. I can't understand their loyality. They are going back to see Storm in the New Year to see what can be done. I think they are crazy.

They are basically back to where they started when they were first married.
i.e. a huge debt but now only a limited amount of working life left to pay it off. Looks like they need to pay about 4K a month for 10 years just to keep their house, then there's the running costs, keeping a car going, buying food etc...
But he doesn't even have a job now !
I don't think it's looking that good for them.

Mash said:

We have lost 4 million dollars and now owe colonial $200,000 and the ANZ 2.3mill. Joined storm 3 years ago. Got to nett worth of 12 mill...now broke and selling all our property, even the roof over our heads. From multi million to zero in 3 years after working hard for 25 years in our successful business. Never trust any one again.

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Do you mean that your initial investment with Storm was $4 million?

When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?

Re: Storm Financial Group Class Action

This type of financial advisory failure appears on a regular basis and is usually successful at attracting people immersed in their career, family and life. Usually they neither have the time, expertise nor in many cases the will to follow the disciplines of investment. They rely in sanguine naivety on the presentation of the cohort of advisory types in the community for guidance and then as a backup believe that the government with their sophisticated financial regulatory infrastructure will come to their aid when the bubble bursts.
Sadly that is not true; what does occur is immense pressure on the individual’s career and family to the extent that break-up, job loss, chronic depression and even suicide results. The initial reaction is disbelief and turmoil. What to do? It is a sad picture but may I say that in this situation you are not alone.
Having been through such a firestorm may I offer you the following simple response that worked for our group some years ago resulting in cash investments recovered and directors jailed.

You are not a lone individual in this situation, you are part of a large group and your aim should be to take advantage of that fact and build the group into a cohesive force against those that caused your situation and took fees/profits for so doing. Also Australia has a great legal system.

A class action is required; that is the most effective tool for a group of individuals wiped out financially by investment failure. Legal action can be undertaken utilising a litigation funding company or alternatively in some cases larger corporate legal firms will act on the basis of nil up front and a 30% trailing fee if they think you have a case.
The group needs to assess the situation and organise a lead administrative volunteer team and agenda; this should be done at a series of coordinated meetings facilitated by a strong chairperson. You will need to create a structure of sub group organisers to make sure information and responses are free flowing to all group members in their specific areas and towns. The first obvious major task is to access a list of all those investors involved.
The down side is that this takes time (seven years for our group-although it was complex) and personal effort; the initial major hassle is cohesion of the group both practically and legally. Expect no help from the government or industry agencies whilst they make the laws and regulations they are not very effective at policing them for the individual.
With modern communications and your assets/house at stake you will be surprised how easy it becomes after the initial shouting dies down.
Good Luck.
This post is my opinion only; it remains your call as to your actions. :swear:

Julia said:

Do you mean that your initial investment with Storm was $4 million?

When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?

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Mash

Commiserations for your loss. But I find myself asking similar questions to what Julia has asked. With the sort of wealth you once had, even when you were worth a 'mere' 4 million, surely it was time to think that maybe you didn't need any more wealth, particularly of the kind derived from high risk investments. If you were making staggering returns, if your wealth was growing at an amazing rate as it can do if you leverage heavily enough, surely it must have occurred to you that such returns are invariably accompanied by high risk?
Did it never occur to you that it would have been prudent to retreat to safer investments?

stop losses anyone????????

how can you let your stocks fall by half and not get out?????

investors: someone who'll hold in a bear market in the mistaken belief 'itll come back'.

Sqwark
May I ask what company you invested in that you recieved cash back?

I would be very suprised if people get anything back. You must remember we are talking about alot more money here. The PI Insurers will have get out clauses that limit them to xxx, and the financial advisers will not own anything, so I really just cannot see where funds will come from. Justice may be done in the form of banning of auth reps, canceallation of AFSL but any further id be suprised.

AFSL tests how well u understand regulations. not if youll make any money.

Clive James view on making money:
http://news.bbc.co.uk/2/hi/uk_news/magazine/7808009.stm

Stormin_Norman said:

AFSL tests how well u understand regulations. not if youll make any money.

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I think you read my post wrong, Sqwark was staing that a class action may bring about financial remedies for clients, all i posted was it is more likely that the Auth Reps standing and AFSL will be affected.

no. i was just pointing out AFSL doesnt mean what a lot of people looking for advice think it means. that is people know what theyre doing.

The website is still down.

It looks bad for the investors.

They said they would be back on board this morning.

gg

I honestly thought this thread was a fraud why would anyone who had made millions put it all into high risk stuff

pacestick said:

I honestly thought this thread was a fraud why would anyone who had made millions put it all into high risk stuff

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greed.

Julia said:

Do you mean that your initial investment with Storm was $4 million?

When you "got to net worth of 12 million' did you consider that maybe that was enough of an asset base to fund your retirement (many would consider that $4M was) and get out?

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Hi Julia,

When you consider people who are seriously wealthy, most of them got that way by taking risks and using maximum leverage.

In 4 years of 20+% sharemarket returns at 80% leverage you would have almost doubled your money annually.

ie 1 million to 8 million ( if no fees were involved)

if u did not monitor things on a very regular basis, with that leverage you could be wiped out completely in the year 2008.

there are so many people who have been in business or inherited or sold there place in Sydney that would put $1m into an investment and believe they were on a great thing, its not funny, they would not be sharemarket sophisticates.

I had money in 2 geared share funds) Colonial First State and Macquarie Geared) and they performed fantastically for 3 years.

Luckily I sold them as soon as the market was down 10%.

I would hazard a guess a lot of people didnt

I can only assume Storm had pooled funds, otherwise what took place could not have occurred.

I would be interested to know

i know someone with $6mil in storm.

she didnt listen to me. i only say things once usually. and i warned her 3 times.