Storm Financial Group

Julia said:

Wouldn't you or whoever was the client have received all the documentation when the loan was made?

It would also be interesting to know, if any of you investors can explain this, what you actually received from Storm in terms of documentation.
e.g. was there a written investment strategy, detailing level of risk?

That would be the most basic expectation I'd have if consulting any financial adviser.

What sort of risk assessment did they do in interview to determine appropriate level of risk?

How did they determine your aspirations/what you wanted the plan to do for you?

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sails said:

Julia, from reading the stories on this thread, it looks a bit like Storm may have taken advantage of people with very little knowledge of investment or risk.

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Agreed. My questions above were designed to discover how professional the approach from Storm was, in that all the above should have been undertaken before any investment was made. They were not meant to underline the naivete of the investors. I'm trying to work out what liability Storm may have. My understanding (which could be wrong) is that to carry out a proper risk assessment and provide an investment strategy is mandatory.

They acknowledge that they knew nothing and that's why they went for help. Would be doubtful if they would have known the right questions to ask.

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I realise that. I wasn't suggesting they should have instigated the risk profile, investment strategy etc., but was simply asking if this had happened. The question does not reflect on the clents, but on Storm.

Under the Credit Finance Act, loans made that were non-commercial in nature, must have a reasonable chance of being repaid to the lender. It is the lendors responsibility to make reasonable investigations that when money is lent, it has a reasonable chance of being paid back.

Not sure if this is even relevant here as I haven't been paying attention to this thread. However, if there was lending involved on a non-commercial basis, perhaps this Act could have some relevance.

Anyhow, if you don't think this is relevant at all, just completely ignore my post as I am not up to scratch with all of the facts here.

awg said:

its almost academic now

but reputable FP have you answer a questionare that profiles your risk profile.

I was of the belief it was mandatory.

From that, your profile can be deduced, ie conservative,neutral, assertive aggressive etc.

Then they place you in a diversified range of cash, fixed interest, bonds, equity, property, to suit.

leveraged equity would be reserved for the highest risk profile only!

I still have my original plan, even though am no longer with FP.

I repeat all investors should have copies of their original documentation

You may wish to check with FPA about this

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Thank you, AWG. This is what I was getting at in my questions earlier.
If Storm have not done this, that will increase the case against them.

Temjin said:

No, a risk assessment, or rather a risk profile is to look at the current life stage the client is in and his/her sensitive to risk. It's definitely mandatory and subject to audits.

A rule of thumb (based on study materials) is younger people with few debt will be able to take on more risk than those who are in retirement already. Of course, this rule may not necessary apply if the client's personal risk adversity is too low to accept the standard level of risk that he/she should take. i.e. he is young, can take a bigger risk, but refuse to do so because he prefer things to be safe, thus, take a balanced portfolio instead of full 100% share on margin. Or of course, it can go the other way. The retiree is asking to take on more risk against the advisor's advices.

To your last question, it's not. They completely violate every rules in the financial planner's book when it comes to risk assessment. Storm is only in it to maximum the amount of money one can put into their branded investment products. Or probably in denial that a black swan event will never happen to them.

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Thanks, Temjin. Further confirmation of what I was thinking.

cuttlefish said:

This is a good explanation. In my view what the financial planning industry needs to do is make these risk assessments mandatory and have standardised 'risk levels' (e.g. minimum risk, low risk, medium risk, high risk, kamikaze) with an accepted, industry wide description of what each risk level means. They then should get both the adviser and client to sign the risk assessment with the adviser incidating that they acknowledge the clients desired risk level and the client acknowledging they've accepted that risk level. It should be a standard form in large bold font - a bit like some of the documents used in real estate - and include an independant witness signing it.

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I'd have hoped this was already a mandatory requirement.

That way regardless of any 'rhetoric' they spout about everything being safe - when the cr*p hits the fan the client will have a document to fall back on. Alternately if the client comes in hungry to bet it all on red but then turns around and complains about the risks they were put into the adviser also has a document to fall back on.

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Exactly. A properly executed risk assessment, investment strategy, should provide protection for both adviser and client.

A further question to Storm victims:
Did you receive regular statements showing your position?

cuttlefish said:

Who would they sue though? It doesn't sound likely that there would be any money left in Storm after secured creditors are paid out.

I guess they'd have to try to sue someone for professional indemnity (who though - the company? the individuals?) and hope that the indemnity insurance covered it. I guess the indemnity insurance should still stand if it was paid up at the time that the professional misconduct occurred - even if the company doesn't exist any more.

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I believe that class actions wont proceed. Each client has a different set of circumstances, structures, equity and/ or margin loan providers, SoAs, liabilities etc.

Storm only now exists as a memory, a spur in evolution, a financial variation that failed. Darwin would be proud.

As for former clients seeking a remedy, I believe that individual action will be required. Good luck I hope they all live long enough to see this to finality.
Who would the action be targeted at ? Maybe the Banks in some cases, maybe the directors in others and maybe a combination of both.

I believe that the insurers will be seeking to check all avenues to see if they are legally liable to make any payment what-so-ever. Any legal out they can seek woud be good business sense for them.

As for the Cassimatis's it must be truely devastating for them as well, they appear to have been true believers in their business, strategy and with their quest to help their flock of faithful. (Plus live rather well for their efforts).

They don't appear to be fly by nighters, nor scammers from an overseas boiler room, or running an off shore scam. They are highly visable people in their community. Aussies that gave it a go but ended in a train wreck and for whatever reason they got it wrong. There's some huge learnings for them as well out of all of this.

It's real shame that the whole thing ended like this but economics is a hard master, there's no sentiment in business , when things fark up badly you take it on the chin, get up, pick up the pieces and move on.

There's going to be finger pointing, blame, tears, regrets, what ifs etc.
But the fact is it blew up in a big way. We live in a great rich country, even the poorest here are rich compared to the way most others live in the world.

We have a welfare system that other countries can only dream about.
Most Storm victims will survive, most will have an acceptable quality of life, most will have friends and family to get them through all of this. Most will get through and survive this, somehow the Aussie fighting spirit will win through.

Don't get me wrong I know some are really hurting badly, some may be in a very bad way. ( Call Life Line or Beyond Blue...Talk to someone, any one).

But it's only money, you can't take it with you..... Houses are just houses, Homes can be anywhere and are where friends and family gather.

If you've got to start again..START AGAIN.
If you're running out of time/or are too old to start again....START AGAIN
If you're feeling down, scared and don't know what to do....START AGAIN.
Inaction is a killer..get moving NOW, no matter what your circumstances are, and never give up, never feel sorry for yourself or wollow in self pity.

If you ended up knocked to the canvas, GET UP. If you get knocked to the canvas again GET UP AGAIN. If the person beside you gets knocked down, help them up...... get it??

Gee Whiz, Solly. It's all so damn easy isn't it, to just "get going and stop feeling sorry for yourself" , well, when you're not affected, that is!

I have no idea how retirees in, say, their 70's are going to 'get started again' if they have lost everything they've worked all their lives to acquire.
Ever tried living on a government benefit?

Julia said:

Gee Whiz, Solly. It's all so damn easy isn't it, to just "get going and stop feeling sorry for yourself" , well, when you're not affected, that is!

I have no idea how retirees in, say, their 70's are going to 'get started again' if they have lost everything they've worked all their lives to acquire.
Ever tried living on a government benefit?

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Julia,

No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.

There are only two options...
You either give in and die or fight to survive.

The choice is yours.

I made the active choice to choose to survive.
Was it easy...no.
Did it happen overnight...no.
Was it hard...you bet it was.
What did it feel like when I beat my challenges....
Like winning 10 gold medals at the Olympics.

Somebody offered me a little advice about how to eat an elephant.
Of course it's one bite at a time.
We all have our own challenges or "elephants to eat".
Sometimes it is better to remind ourselves to "eat" them one
bite at a time.

I avoided negative people & influences.
I met people that were also facing huge challenges in their life as well.
And I met those who had survived the most unbelievable things you could imagine. To put it in perspective living on welfare would have been a luxury to them. Most of them survived, some you will see even see in the media today, some you may pass in the steet and have no knowledge of what they experienced.

You say you have no idea how people will start again in there 70's, then I suggest you ask them, or maybe offer to help them.

If you are in your 70's and believe you are finished because of the Storm experience, then you ARE finished.

There are always choices....always alternatives.....as long as you are breathing there is always another way out. But you must NEVER lose the momentum or the will to change your circumstances and seek a way to better your position.

There are no excuses....there are only choices.

Solly said:

Julia,

No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.

There are only two options...
You either give in and die or fight to survive.

The choice is yours.

I made the active choice to choose to survive.
Was it easy...no.
Did it happen overnight...no.
Was it hard...you bet it was.
What did it feel like when I beat my challenges....
Like winning 10 gold medals at the Olympics.

Somebody offered me a little advice about how to eat an elephant.
Of course it's one bite at a time.
We all have our own challenges or "elephants to eat".
Sometimes it is better to remind ourselves to "eat" them one
bite at a time.

I avoided negative people & influences.
I met people that were also facing huge challenges in their life as well.
And I met those who had survived the most unbelievable things you could imagine. To put it in perspective living on welfare would have been a luxury to them. Most of them survived, some you will see even see in the media today, some you may pass in the steet and have no knowledge of what they experienced.

You say you have no idea how people will start again in there 70's, then I suggest you ask them, or maybe offer to help them.

If you are in your 70's and believe you are finished because of the Storm experience, then you ARE finished.

There are always choices....always alternatives.....as long as you are breathing there is always another way out. But you must NEVER lose the momentum or the will to change your circumstances and seek a way to better your position.

There are no excuses....there are only choices.

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Great post

Solly said:

Julia,

No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.

There are only two options...
You either give in and die or fight to survive.

The choice is yours.

I made the active choice to choose to survive.
Was it easy...no.
Did it happen overnight...no.
Was it hard...you bet it was.
What did it feel like when I beat my challenges....
Like winning 10 gold medals at the Olympics.

Somebody offered me a little advice about how to eat an elephant.
Of course it's one bite at a time.
We all have our own challenges or "elephants to eat".
Sometimes it is better to remind ourselves to "eat" them one
bite at a time.

I avoided negative people & influences.
I met people that were also facing huge challenges in their life as well.
And I met those who had survived the most unbelievable things you could imagine. To put it in perspective living on welfare would have been a luxury to them. Most of them survived, some you will see even see in the media today, some you may pass in the steet and have no knowledge of what they experienced.

You say you have no idea how people will start again in there 70's, then I suggest you ask them, or maybe offer to help them.

If you are in your 70's and believe you are finished because of the Storm experience, then you ARE finished.

There are always choices....always alternatives.....as long as you are breathing there is always another way out. But you must NEVER lose the momentum or the will to change your circumstances and seek a way to better your position.

There are no excuses....there are only choices.

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I agree, I agree I agree -I spent yesterday working through my choices had a list worked out of what I could possibly do in my 60's - widow, retired 5 years ago. Currently I have exactly $4000 to my name a mtge payment of $3000 due today, some how I have to hang on to my house (current thinking). Yesterday I was all fired up with I won't let this beat me. I woke this morning at 4.00am a little less confident but after reading your mantra for life I feel a lot like Rocky can hear that tune in my ears and will fight another day. So out with my trusty excel sheet and more calculations.
Thank you

I dont know exactly what has happened in this situation!

The greatest thing about these kind of situations is what the big firm cant read or forsee is from the judiciary.

Dont worry small retail investor...EVERYONE is scared of the outcome...that's the key! I repeat everyone!

Its like sending smoke signals.....

We lost, you lost BUT who really LOST!!!!!:bekloppt:

Dunno?

DYOR

shibby said:

I agree, I agree I agree -I spent yesterday working through my choices had a list worked out of what I could possibly do in my 60's - widow, retired 5 years ago. Currently I have exactly $4000 to my name a mtge payment of $3000 due today, some how I have to hang on to my house (current thinking). Yesterday I was all fired up with I won't let this beat me. I woke this morning at 4.00am a little less confident but after reading your mantra for life I feel a lot like Rocky can hear that tune in my ears and will fight another day. So out with my trusty excel sheet and more calculations.
Thank you

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That's the way, shibby. Let that be your theme song. I too had a fighting anthem that I would play, hum, sing, whistle. It was a constant re-enforcement that I would dig myself out of the disaster I was in. It wasn't a case of IF I survived but HOW I would survive. We all create of own luck, you just have to be constantly looking for ways to MAKE things better, then following through with ACTIONS.

Some things I tried worked, some things didn't.

I questioned, asked, sort other opinions, I was relentless. Some days there was a black cloud hovering above me, so I just moved out of its way so the sun would shine on me. Initially I went through the 'why me', 'how could this have happened?'. I soon realised that these questions and feelings were of no benefit to me. So I chose not to ask these questions again.

I don't believe their are any "Storm Victims" out of this episode...their are no victims...... It's just a set of events that happened to good people who now must seek their own path out of it. Doing whatever it takes for them to do it, with help from those around who can assist, legally, emotionally, physcially, etc. But really their best assistance will be themselves. Tap your inner strength, unleash the fire within. If you don't have a fire within, then light one yourself.

The language you use, the people you associate with and the thoughts you carry will mould the outcome for you.

If people see themselves as victims that's what they will be, if they see themselves as victors over this event, continually doing whatever it takes to overcome what has happened, that is what the outcome will be.

I didn't realise what strength I had until I started to feel real pain and discomfort. I didn't like it. Life isn't fair, that's what happens.
In life the buck stops with you. The next step, thought, action, feeling is your call... the next step it up to the most powerful person in your life ...YOU.

NEVER sell yourself short or underestimate your own abilities.

Thanks for that Jayan, I have no expectations of getting fees back, however I would like to strongly pass on my displeasure to the Storm people how they took people on and invested only days before they went under.

Jayan said:

There was a news on our local channel tonight (Qld) that the administrators are setting up something on their website for investors help. Also said letters are going out in 2/3 days.

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Glue said:

Thanks for that Jayan, I have no expectations of getting fees back, however I would like to strongly pass on my displeasure to the Storm people how they took people on and invested only days before they went under.

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Having dealt and been burnt by them this comes as no surprise that they were taking fees and clients up until they shut the doors . Just plain wrong and another fine example of their complete disregard for the clients best intrests and denial of the situation surrounding them. Just like the captain of the titanic " ICEBERG WHAT ICEBERG ??" and band plays on..

Solly said:

Don't get me wrong I know some are really hurting badly, some may be in a very bad way. ( Call Life Line or Beyond Blue...Talk to someone, any one).

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This is very good advice. Lifeline will listen and many people need to talk through and go over what has happened extensively as part of being able to move on.

Solly I agree with a lot of your sentiments - its all very good advice. Its important also to remember that when people are in the thick of facing their own despair it can be hard sometimes for them to see that future and find that motivation.

The first stages of an experience like this, a lot of people will go over and over again the process that led them up to the situation. Many people that took these highly risky investment strategies will have been careful and conservative their whole lives - and will be wondering how?, how?, how did I let myself, at this stage in life, get roped into such a stupid thing, and now I've lost it all, everything I worked so hard for gone. Many will feel deep guilt (towards their partners, their children, their pets, their friends etc.) for allowing/creating the mess.

Many who may have prided themselves on their conservative nature and their sound wealth management in the past will feel extreme shame and huge damage to their self esteem and self image.

At the late stage in life they are at, many will feel that its not possible to move on.

For anyone out there in this situation or that knows people in this situation some things in my view that can be done to help are:

* Undertake physical activity - go for a walk, get out into the sun etc. - sunlight is a mood enhancer, so is physical exercise. (For people that are very deeply depressed, even this first step can be hard to do - it will seem pointless - but the act of performing activity will help).

* Help them to understand that, regardless of the circumstances that led to the situation, they shouldn't blame themselves or feel guilty and that they are forgiven. Help them to understand that their intentions were right, they were only trying to do the best for their family and loved ones and that everybody makes mistakes, small and large. There are those that will try to blame others and have a lot of anger. Help them to forgive themselves first, so that they in turn can start to forgive the others they perceive have contributed/caused the problem.

* If you are able and willing to give them financial support let them know. Similarly let them know that you will be there for them and support them as they work their way through the crisis.

* Help them to visualise the future again - ask them to describe what would make them happy, what would happiness be for them. Quite often this process will help to make people realise that its often the simple things in life - time with family, friends, a walk on the beach, playing with a pet dog/cat etc. that are the most important ingredients to happiness - and these can be achieved with only a minimal amount of money and support.

Solly said:

Julia,

No I'm not affected by this but I have been affected by something much bigger than this, and I'm still here.

There are only two options...
You either give in and die or fight to survive.

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I'd have thought the options were a bit less dramatic than that, i.e. don't see that dying is the alternative.

I guess most of us have been through crises before. I have. And, yes, I survived too. So will these people survive.

You've offered the inspiring words which undoubtedly will raise spirits.

Now, how about some purely practical suggestions regarding how people with insufficient income to meet their obligations can raise that income?

Cuttlefish, great post.

We still need answers to e.g. if you are now on government benefit which doesn't provide capacity for outgoings, how are you going to solve this?


Solly, I wonder what age you were when you experienced your crisis?

Monario said:

to all those interested, please follow this link to an exposure list I have begun.

https://www.aussiestockforums.com/forums/showthread.php?t=14074

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Just a reminder...

Julia said:

Agreed. My questions above were designed to discover how professional the approach from Storm was, in that all the above should have been undertaken before any investment was made. They were not meant to underline the naivete of the investors. I'm trying to work out what liability Storm may have. My understanding (which could be wrong) is that to carry out a proper risk assessment and provide an investment strategy is mandatory.

I realise that. I wasn't suggesting they should have instigated the risk profile, investment strategy etc., but was simply asking if this had happened. The question does not reflect on the clents, but on Storm.

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Apologies if I misinterpreted your thoughts, Julia - I tend to skim through a bit

I agree, it does raise a lot of questions regarding Storm.

Is anyone going to the Creditors meeting next week? Would be interesting to know what is said.

sails said:

Apologies if I misinterpreted your thoughts, Julia - I tend to skim through a bit

I agree, it does raise a lot of questions regarding Storm.

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Heavens, no apology required, Sails. You were quite right to emphasise the unsophistication and vulnerability of the clients.