'God brought you to me'
A financial planner who has interviewed dozens of former Storm Financial clients has revealed some of the strange practices employed by former Storm agents to get sales across the line.
David Price is the managing director of fee-for-service group Strategy First Financial Planning. In a submission to the joint committee inquiry into financial services, Price said he and his business partners have met with at least 25 former Storm Financial clients to offer pro-bono advice. The Sydney-based group has also been in contact with two former Storm Financial employees.
Price said over the past seven months he and his partners have “gleaned consistent evidence of the nature of the problems” that they believe led to the demise of Storm Financial, including a lack of focus on the risks of the strategies recommended by the group and a “one-size-fits-all” approach to advice.
Price also pointed to a culture of greed within the group as one of its fundamental flaws. He pointed to what he called a bias within the Storm model to encourage clients to invest as much as possible, a strategy that “maximised fees for Storm and its advisers and maximised risk for their clients”.
“In the case of one particular Storm Financial office, we have consistent anecdotal evidence that suggests the financial planner there would say almost anything to clients get them to sign,” Price’s submission states.
“One such example involved the financial planner telling a priest that ‘God brought you to me’.”
Price is yet another member of the financial services industry to criticise the structure of the financial services industry in a submission to the Rippoll inquiry, saying “the nature of remuneration through commissions and third-party payments has, regrettably, created an industry that is built on a structurally corrupt foundation”.
Price believes one of the problems with the Australian financial services industry is that consumers put faith in their financial planners, many of whom are actually financial product salespeople with their own interests, rather than impartial advisers.
He argues that the “majority of clients seeking financial advice throughout Australia are not getting independent advice, but solutions built around products and their distribution”.
“In an ideal world, there would be no product alignment in the financial planning industry,” Price’s submission states.
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