Storm Financial planners in the red

Twelve owners of financial planning businesses acquired by Storm Financial have lodged proof of debt claims with the administrators of the collapsed group.

Ron Jelich, who was one of the public faces of Storm, has lodged the most substantial proof of debt. Jelich is claiming $8 million under his own name and more than $284,000 under Ron Jelich Professional Planning Pty Ltd.

Jelich was Storm’s national development manager and the head of the group’s Redcliffe office. As part of Storm’s recent promotional material, Jelich said his income had tripled since joining Storm.

The second highest amount owing is to Trevor and Kathleen Benson, who are owed $5 million. Gus and Antonella Dalle Cort are owed $2.25 million and $1.8 million respectively. Gus and Antonella Dalle Cort are believed to be the husband and wife team who opened the Cairns office of Storm in late 2007.

Robert and Sandra Jones have lodged proof of debt for $2 million, while Queensland-based John R McArdle & Associates Pty Ltd is listed as being owed $1.4 million.

Terry Webb, a Redcliffe planner, is listed as being owed $1 million. An entity listed as the Y & J Family Trust has lodged proof of debt for $800,000, while the Harry Notarus Family Trust is owed $260,000.

Finally, one John Fuller is owed $225,000, while Danielle Fuller is owed $25,000.

The administrators, Worrells Solvency and Forensic Accountants, attributed these proof of debt amounts to ‘acquired financial planning entities’. The total debt lodged with the administrators from these acquired financial planning entities is more than $23 million.

Storm Financial acquired many of these financial planning practices during its acquisition phase from 2006 onwards, but the company collapsed under the strain of falling investment markets and other factors before payments to the vendors of these businesses were completed.

Worrells said, in some instances, the claims by the vendors of financial planning firms included a claim for a share of income earned from clients introduced by those firms.

In January this year Storm Financial continued to receive commission payments from various financial services companies, including MLC, Macquarie, Commonwealth Bank-related entities and various insurance and other companies.

Storm’s net recurring revenue in January this year was more than $450,000, according to business broking firm Kenyon Prendeville, the company appointed by the receivers of the group to sell what is left of the collapsed planning firm.

The client books sold by these vendors to Storm Financial are now being bid on by other financial planning firms wishing to acquire their business.

As at March 16, more than 50 of Storm Financial’s former clients had lodged proof of debt forms with Worrells for amounts totalling nearly $19 million.