Financial advisers

There’s no doubt that the Storm Financial disaster has left a bitter taste in the mouths of the people that have been left destitute.  Further, it may well have “turned off” many people that were considering using a financial adviser for their future financial needs. Are people justified in being cautious where financial advisers are concerned? Most certainly, they are because the Storm saga has clearly demonstrated the pitfalls that exist in the financial sector, the lack of safeguards in place, and the rogue elements that still permeate the investment sector.

The government has reassured would-be investors that they have now fixed the problems with a raft of new reforms. If you trust what the government tells you, then by all means go ahead, but I personally have little faith in this Government and former governments that have got it wrong for so long!

Whatever the outcome of litigation that is now taking against the banks that were involved in Storm Financial’s flawed schemes, little will change. The banks will still hold the balance of power and some financial advisers will still continue to churn money out of unsuspecting clients.

Some financial advisers that worked for Storm are claiming that they too were duped by the Cassimatises. They, like many others, invested using the ‘Storm’ financial model, and they too were “burned” like many of their clients”. Consequently, they, themselves, have now joined various class actions against the banks. I have no doubt that many of these advisers were taken for a ride, BUT it must remain a concern when people that were trained to give financial advice could not spot the flaws in the Storm financial model even though they were reputed to be financially savvy in matters of investing?

What it does highlight is how plausible Storm’s financial model seemed to one and all. Even ASIC fell for it and gave Storm a clean bill of health. The banks went along with it too but their motives were strictly self-serving.

There have been a number of cases in the media where financial advisers have misappropriated clients’ moneys. In some case, millions of dollars have been involved. The Courts rap them over the knuckles and sometimes give them short jail terms despite the lives they have destroyed. In the case of Storm Financial, thousands of ordinary Australians have suffered financial ruin. Helen and I are just two of Storm and the Banks’ victims. 

We, for our part, had a Storm financial adviser by the name of Stuart Drummond. I made it a point from the start to pursue this man to Hell and back if need be because that’s where he put us. My suggestion that he and other rogue Storm financial advisers be identified and named was met with my being labelled “vindictive” by some, and, I was told, could lead to repercussions. 

This, to my mind is a load of ‘bollocks!” I made it my personal goal to have this man removed from the ranks for ‘conduct unbecoming’ and my efforts through ASIC as well as the efforts of some others that he misled, resulted in his being given a four year suspension. Incidentally, he was the first Storm financial adviser to be so charged with malpractice.

When we first met Drummond, he didn’t have a label on his hat saying, “Rogue” and that’s the problem would-be investors face when they seek financial advice. There is no way of knowing whether the person you are dealing with is ethical and the advice he or she is giving is sound.

Another problem is that there is no way of ensuring that your money will be protected. ASIC are toothless in many respects, the Government is unmindful, the banks are a law unto themselves, the Law itself slow and uncertain, the statutory regulations vague and ambiguous, and the ‘professional indemnity insurance’ existing in the financial industry, that should offer some form of protection, not worth the paper it is written on. If you don’t believe me, read what I have to say on this website.

Storm Financial lost 1.6 million dollars (unencumbered) of our money in 15 months.

Still thinking about investing using financial advisers?  Take your money to the casino instead. Even on a bad day you couldn’t possibly lose so much so quickly!