Wellington Capital PIF/Octaviar (MFS) PIF

marcom · 14 July 2009

Re: Wellington Premium Income Fund

Hello Seamisty

Just read your post on the other forum about the hardships experienced by PIF investors. We are in that category - 12 months ago we had to rent out our house (we now live with my wife's parents) to generate some extra income to make payments to the ATO for a capital gains tax liability on the sale of a property, the proceeds of which are stuck in PIF along with all the rest of our hard earned savings. We have managed to make just enough to live from our business so far. We have 5 and 7.5 years to go until we can get a pension. As it looks like the class action will take some time, we now have to sell our house so that we will have enough to continue on for a couple of years. We will manage to cope some how.

My question is: What constitutes losses incurred in PIF? Naturally losses include capital, lost interest? But can they also include losses on sale of personal property as a result, removal expenses etc? What about compensation for the years of stress and misery, even loss of health as a result? Can you help with some clarification of what will be covered.

MARCOM

Calliope · 14 July 2009

Re: Wellington Premium Income Fund

Seamisty, I support the action wholeheartedly. Do you know what role Wellington PIF has in this action if any?

BootsnAll · 14 July 2009

Re: Wellington Premium Income Fund

To all you hard working members of PIFAG out there.

I have been following all your information here and on HotCopper.
What great news to think something is finally being done to catch those crooks who took our money.

I have sent a letter to the Parliamentry Committee hoping someone there will listen.

Thanks for all your time and effort.

Great work!

Duped · 14 July 2009

Re: Wellington Premium Income Fund

The following is not directed at anyone here.

One thing I have learned from MFS is BUYER BEWARE. Including governments selling the idea the've done something material about protecting consumers. Government and the likes of ACCC and ASIC are WAY overselling their capability in a dangerous game of self promotion by well meaning but totally naiive, ambitious bureaucrats.

I'll make a submisson to Ripoll but read/listen to this morning's ABC Newsradio report 'CBA Squeezes Brokers' by Di Bain to see how fearless players are of the regulators. How little regard they have for the concept of independence in financial advice. Or perhaps more sinister, taking advantage of the perception of independence. The ACCC's response "the ACCC at this point has decided that they're constrained by the Trade Practices Act, aren't able to do anything in this case". It's simply stunning.

http://www.abc.net.au/am/content/2009/s2624978.htm?layout=popup

I've had a look at the ACCC and ASIC websites. Couldn't find anything there detailing what they CAN'T do. Look at the ACCC page about professions as an example. http://www.accc.gov.au/content/index.phtml/itemId/5975 It lists examples of professions. What a great opportunity to list industry groups that are NOT professions.

ACCC's page then declares under "Financial Service"

"(ASIC) is the consumer protection regulator for financial products and services. ASIC has powers to protect consumers against misleading or deceptive and unconscionable conduct affecting all financial products and services.
If your concern relates to misleading or deceptive conduct involving a financial product or service, such as credit, banking, investments, superannuation or insurance, the ASIC may be able to help you. Contact ASIC on ..."

WHY ON EARTH IS THE ACCC advertistising this capability, these powers; when ASIC is NOT in a position to exercies these powers even in an extreme circumstance like ours. It's blantantly misleading and disarmed consumers like me against the totally conflicted behaviour by my licensed advisor.

There's ASIC's website. It directs us to FIDO. The name implying some sort of watch dog capability? Another dangerous misconception. Sorry cat lovers, ASIC is more of a watch-cat. Soft and cuddly, good company but only really good for keeping the small rodents out of the house.

FIDO's "Managing Your Money" declares "Always check the facts: ask questions and get professional advice." Use of the word 'professional' is a bit misleading now isn't it? It's a stretch to fit Financial Advisers in the ACCC's definition of 'profession'. I couldn't find any definition of a "professional" on ASIC's website. ASIC's page 'Starting Your Personal Investing' states "It may suit you better just to go out and choose a licensed financial adviser and follow their advice. If you want to do that, please read our tips on Getting advice." WHAT???

ASIC's 'please' sent me to the page 'Choosing your advisor'. What a total and utter cop out from saying in a few simple words: BUYER BEWARE. ASIC puts ALL the onus back on us consumers in a dangerously understated manner.

Not only are ASIC's warnings understated but their assertions of regulation are overstated. How about this clanger "ASIC licenses and regulates the financial advisory industry so that it operates efficiently, honestly and fairly". WRONG.

Then under Fees we're told that commissions and bonuses "can set a up a conflict of interest between what’s good for your adviser and what’s good for you. (The law deals with this potential problem by requiring advisers to manage conflicts and also to tell you about all commissions.)" FAILED law in our case. This clause is dangerously misleading, omitting that ASIC is in no position to prosecute on your behalf.

And there's impressive TLA's like FPA and CPA, contributing to the perception of quality.

More dangerously overstated and misleading propaganda is the "see if we've banned someone from advising". Sounds impressive. WRONG. The list is severly limited and wallpapered with disclaimers. Stunningly, it only covers those that are CURRENTLY banned/disqualified. Some of the shonkiest advisers (IMO) get just a few years ban. It's a step above useless for the exercise of finding a quality financial 'professional'. A watch-cat taking out a few small rodents; that's all. But that's not the messege the ASIC 'Choosing your advisor' webpage is selling.

The government is complicit, even actively promoting conflicted financial planners. Even now, while so many of us have been hurt, continues to participate. Giving licensed financial advisers a big tick of approval and steering us into their conflicted web.

I for one was duped.

Duped · 14 July 2009

Re: Wellington Premium Income Fund

CBA Squeezes Brokers
Di Bain 14 July 2009 8:21am
View or listen to the report on http://www.abc.net.au/am/content/2009/s2624978.htm?layout=popup

"TONY EASTLEY: The financial crisis has turned Australia's mortgage sector on its head. Banks now write nearly 90 per cent of Australia's home loans.

Small home lenders have been squeezed out of the market and mortgage brokers say the big four banks are starting to flex their muscles.

The Commonwealth Bank has told thousands of mortgage brokers they won't be allowed to offer the banks loans if they don't write enough business for the CBA.

Di Bain reports.

DI BAIN: In Australia the mortgage broking industry writes about 35 per cent of the nation's $15-billion home loan market.

But as the number of home loan's shrink in line with the financial crisis and the banks get bigger, the industry that thrives on keeping loan rates competitive says it's coming under pressure.

Wayne Ormond is the executive chairman of Queensland based mortgage brokers Refund Home Loans.

He says the Commonwealth Bank has told 8,000 mortgage brokers that they must write a certain number of its loans or face the chop.

WAYNE ORMOND: This is the issue. The issue is that if they are, their accreditation is taken away, what happens is they then have to go and sit through a reaccreditation workshop which is telling them all the same things they already know and then charge them $500 for the privilege. So my whole point is that rather than doing that, what a broker is going to do is write Commonwealth Bank home loans.

DI BAIN: The new policy into effect on July 1st.

Mr Ormond says the new rules are bad for customers and he claims other banks are considering tightening up their lending policies too.

WAYNE ORMOND: I think they are thinking about it and that is where it is particularly dangerous and that is why I made the complaint to the ACCC.

DI BAIN: And what has been the response from the ACCC?

WAYNE ORMOND: Well, the ACCC at this point has decided that they're constrained by the Trade Practices Act, aren't able to do anything in this case but I am sure that they will be monitoring the situation.

DI BAIN: The Mortgage Industry Association's Phil Naylor says the banks have a lot of power over the mortgage market and they're using it.

PHIL NAYLOR: The facts are that over the last two years, the major four banks have increased their market share significantly, mainly because the non-bank have fallen out of the market largely because they rely on securitization and that securitized market to mortgages has just pretty well disappeared.

DI BAIN: In saying that they have market power, are they using that to muscle in on brokers?

PHIL NAYLOR: Brokers are writing still about 40 per cent of all mortgages so the broker channel is very important to the lenders but what they have been doing over I suppose the last couple of years is trying to rationalise their use of brokers and from their point of view, to make that, their use of brokers more efficient.

DI BAIN: The Commonwealth Bank and the Australian Bankers Association has been contacted for comment.

TONY EASTLEY: Di Bain reporting."

charles36 · 14 July 2009

Re: Wellington Premium Income Fund

M/S Hutson has agreed to assist the class action. The register of unit holders has been supplied for use by the lawyers and IMF. It has also been agreed that all relevant documentation will be provided to our (unit holders) legal team for use in the litigation where appropriate. In addition Wellington PIF staff will be available to assist our team with the documentation. This was a major breakthrough and will save countless man hours and subsequent cost.

I take this opportunity of urging all unit holders to read the relevant documentation upon receipt from IMF and join the class action. After all is said and done we are in this together and it is our one chance of recouping some of our lost investment. Just remember 60% of something is better than 100% of nothing.

charles36 · 14 July 2009

Re: Wellington Premium Income Fund

Duped, Have read your posts with interest. No doubt you are the same mind as a lot of us, not much interested in what ASIC and other Government authorities can't do but what CAN they do is the salient point and also what have they achieved.

seamisty · 14 July 2009

Re: Wellington Premium Income Fund

Hi Marcom, Sorry to hear of yet another PIF investor who has had to make huge personal sacrifices as a direct result of the mismanagement of our Fund. Your question is: What constitutes losses incurred in PIF? Naturally losses include capital, lost interest? But can they also include losses on sale of personal property as a result, removal expenses etc? What about compensation for the years of stress and misery, even loss of health as a result.
The answer is only my own assumption and opinion I have formed from discussion with others. I imagine our lawyers will be seeking compensation for loss of Unit Value the guide being the average price of units sold on the NSX (the PIF does have a small advantage of being listed) and loss of distributions plus interest. I imagine that all other personal losses as a direct result would be seen as a civil matter and one for investors to pursue on their own individual behalf. This is just my unqualified opinion and I was quoted a minimum of $500,000 for personal legal representation early in 2008. Hence the need for Class Actions to represent large numbers of investors who otherwise would never have the financial means to take a case to court, no matter how compelling the evidence. I am sure this Class Action will be well supported for that reason alone and any financial compensation will be a bonus as far as I am concerned. Regards, Seamisty

marcom · 14 July 2009

Re: Wellington Premium Income Fund

Thanks Seamisty - If we get capital (based on av NSX shareprice $0.10 ie 90% loss) and lost distributions (@ 8.5%) PLUS court determined interest (9%) less IMF % I think we will be adequately compensated.

MARCOM

selciper · 14 July 2009

Re: Wellington Premium Income Fund

Seamisty
As far as I'm concerned, the AG team have proved themselves to be very savvy. The class action is the best news we could expect. Thanks for the all the hard work.

k.smith · 14 July 2009