hi all
i was put in a situation which is a very high risk to say the least by a financial advisor.
in short the wealth creation was for the person not us.
our goals have taken a major set back in so far a developing a property investment portfolio.
the manipulating and twisting of words and seemingly doing what is to my mind is not ethical is beyond my tolerance. we are just not in control of our own property.
you may ask why? well we put our trust in a financial advisor in creating and monitoring a property investment portfolio.(which is what he specialised in) well we regrettably are getting out of our first one we attempted.
well a big warning is beware and trust no one. not even a financial advisor especially with property.
there is no regulation to protect you when i tried to complain no one wanted to know well none of the regulatory bodies. because it was real estate and there is very very little protection from the greedy phiranas.the positive i learnt alot about what to look for next time but at a price.
For the moment we are getting out of the property market
always enjoy reading the experiences from those that know how its done.
i reckon i could write a book with my first experience in the property market but judging by what ive read over time there are many books out there to be written.
kind regards
alfyes there are a lot of shonky advisors out there, most have no training or qualifications, and are mere salesmen. it is a sometimes corrupt profession (though regulation is changing this) where advice is often given depending on the financial kickbacks and commission the advisor receives for promoting certain products. I actually told my recruiter I didnt want to be a shonky financial “advisor” salesman.
Did he actually break any laws?
hi crashy
thanks for the reply well i am not sure i feel that its touch and go but certainly not ethical.
have you made up your mind what you are going to do with the financial positions you were seeking.
you could advise me as a friend seriously
if you havent got of the ground yet do some friends a favour give them some advice of your knowledge if you are good the word gets around word of mouth very powerful.
regards
alfHi Alf,
I am sorry to hear of your experience, A few years ago my wife also lost a lot of money, through bad financial advise.[
]
(the money was compensation from an accident which was trusted to a financial adviser to invest)
Please log onto ASIC’s website http://www.asic.gov.au and report your experiences to them. As an investment adviser (property), I am aware of the failings in this industry and am part of a growing band of professionals trying to have regulations put in place to tighten up this industry. At least stay in touch with this forum and hopefully your confidance will return in time as property investment should be a safe and rewarding experience. Self education is invaluable and you have already experienced the worst of it. When entering this industry, my main concern was to find an ethical company to work through(and I came in contact with many that did not have ethical business practices). One of my passions is regulation of this industry.Bryce Inglis
[email protected]
http://www.ipal.com.auHi Alf,
Sory to hear about what has happened to you.
I guess it’s an expensive lesson in life.
Don’t feel naive, everyone single forumite, can probably think of something or someone they should’nt have trusted, or they’ve done something in their life that they regret. Nobody is perfect. (Especially one financial advisor).[
!]Well, it’s only uphill from here….That was yesterday…This is today. Shake your shoulders and rid yourself of that negativitey!!
The people on this forum, as Bryce said can give you back your confidence. You’ll be learning so much, so quickly, that you’ll be helping others soon.
Life has it’s ups and downs, but when I am feeling down, I try to think how lucky I am to hav my family, my health and my future…
Try to stay positive!!!
We all care……
Del
hi everyone
thanks for the words of encouragement and i think this forum has some of the better people of society.
i am not a wraps person myself and it is illegal in south australia.
i am amazed at some of the stories and wish everyone the very best and prosperity.
I am always open to suggestions and the road is one of sharing and caring.
I think in time people will look to safety rather than risk.
noddies i spoke with asic and they were not interested because the advice was on property investment.
there just does not seem to be any recourse if it happens to people.
my fear is that people that a very heavily geared due to reading books and advice from different people will be very exposed.
regards
alfHi Alf
I would like to help if I can. Perhaps if you tell me exactly what he said (it should be in writing) I can investigate if he has broken the law. I cannot see how a tort of negligence can be excused simply because the advice was property related. Other unlicenced advisors might be excused, but not a licenced advisor doing things by the book.
email me [email protected]
Hi Crashy,
It is situations like Alf’s that give property investment a bad name, and it is this type of thing that need to be stopped through closing the gaps in legislation and also making accountable those that are negliable by law. If you or Alf don’t mind could you keep me informed of the outcome, and if I can assist at all with information or researching anything I would be glad to do so. [8D] On another note, if you would like to send through a resume I can check with the company I consult with, to see if there are any contacts in Queensland that you may be interested in talking to for work.
Bryce Inglis
[email protected]
http://www.ipal.com.auOn a related topic, I’ve just been reading a very interesting passage from one of Jan Somers books re financial advisers. Now I haven’t read this anywhere else, so it bears repeating.
Basically ‘financial advisers’ are chiefly involved in shares and managed funds. Jan points out that their professional education omits property. Thus even an ‘independent’ fee for service financial planner may shy away from property. I have not heard financial advisers on the radio ever disclose this very important limitation to their education. And with this gap amongst reputable financial planners, a gap is opened for the shysters to hop in for their cut!
Although banks regard property as the best form of security, properties are not regarded as ‘securities’. Almost the same word, different meanings. ‘securities’ are shares and the like, and exclude property! Thus they seem to be outside ASIC’s bailiwick (even though the I in their name means investments and property is an investment).
Of course RE agents can advise on property, but they are hardly independent. Then there are those who (for a fee) find property for you.
I only went to one financial advisor, and that was 7 years ago when I first established a portfolio.
Though I will discuss things with my accountant and readily seek advice from others on other matters (eg building inspectors), I too am wary about financial advisers. I run my affairs and think that after a lot of reading and thinking am now competent enough to make a sound plan and take the required. Time will tell if this is the case or not!
Peter
Hi Alf,
Can you please mention what exactly your financial adviser did? In what regard he gave you the wrong advise?
After all this was just advise it is up to you to follow it or not.We lost money some years ago in the share market because of bad advice from financial adviser. Who was recommended by friend of ours but…..[
!]I wonder do we need to use one at all when we invest in properties?
Hang in there don’t give up
hi all
thanks again people im touched that you have responded in the manner you have.
I’d be happy to share more but on a public forum i have to be careful.
the very thing that peterp mentioned in regards to asic was how their attitude was because it was property.
Someone i spoke to the other day suggested i write to the regional manager of asic s.a.
i just feel that by the response i got a few times from them peterp may be right.I’ll try not to be too long winded maggie but it is complex i will try an summarise as best as possible.
-1999-looking for investment property with view of property investment portfolio/ad in the paper re: start property investment portfolio etc.
we responded/we received a package/we met with this individual/ he did the risk tolerance thing suggested my wife stop her managed fund as it is better to pay of debt(personal) and how great bad debt is (a la investment property).we bought off the plan townhouse and land(torrens title)in the cbd to be used as a seviced apartment.(thats what he convinced us was the best starting point).
points
-the figures were not all disclosed
-the loan amounts were not correct
-expenses were not all shown
-cashflows were shown to be positive when in fact with the correct figures they were negative cashflow
-we had to furnish the unit otherwise there would be no rental guarantee.
-the unit would be leased to a company which specialised in accomodation. (later we found out it was his company). he was paying himself.
– he would pay rents after the unit had been occupied and he had been paid (in advance)
-we could only do this if we paid an amount close to $2000 for mortgage monitoring and first year advice. (the mortgage monitoring never happened)
-he was very convincing he could sell (ice to an eskimo) he made the deal look good
– not long after the completion and we started renting the unit he took over the property management agreement we had. he never told us that the person was just holding the money in trust as far as he was concerned(this became a fight btween them).
We have been paying 10% and never had one report
I got to know the property manager and he told me the arrangement was 7% property management charge 3% for the advisor.what i have described is only the tip of the iceberg
I just think as a financial advisor he should never have put us in a position of high risk our tolerance was medium at the extreme.
you have to understand that there were
-delays in construction for many reasons 18 months late.
-he had not negtioated any safety net for us with the developers
he left us exposed to progression payments increasing a various stages of construction and no additional incomeHe sold himself as a one stop shop so to speak his organisation was set up with a lawyer/accountant/and whatever one needed for investment be it shares or property.
HE WAS A SALESMAN NOT AN ADVISOR GETTING KICK BACKS FROM EVERY ANGLE.
WE TAKE ALL THE RISK AND HE CANT LOSE. MANY PEOPLE WENT THROUGH THIS PROCESS (CASHKOWS) THATS WHAT WE WEREthe bank has told us that people have broken down in their office because of the position they were put in.
I do have one question if someone could answer it.
In my lease is says
if the lessee(with the mutual agreement of the lessor) wishes to renew the term of the lease of the premises for x yearsetc. DOES THIS GIVE THE LESSOR A CHOICE WHETHER TO GIVE THE OPTION OF A FURTHER TERM OR NOT.The lawyer i saw said yes it does
the advisor said no it doesn’t.well i hope i havent bored you with too much of this but i fear other people are going to go through the same and i feel powerless. with comments from yourselves it does give me a glimmer of hope that there are good people for this industry.
kind regards
alfI previously spoke at length about our very first investment in 1997.
A serviced hotel unit in QLD, 105,000, promised a 7% return.
Current state: probably complete capital loss and yearly losses, body corp, etc, interest etc.
My estimated total loss to date: $150,000++ not even contemplating the cost of lost opportunity!
There are about 85 other unit owners in the same position. Some own 2 units. About 3 owners are broke, not even the bank can sell them.
We know now through our very helpful body corp manager that this sort of investment up and down the QLD coast has an almost 100% failure rate.
If you ever decide to buy anything “managed”, please check and double check and get absolutely competent commercial legal advice.If possible, avoid altogether.
The whole resort is now for sale.
Also remember, this sort of investment once brought is almost unsellable(no liquidity).
I am now forwarding info to Slater /Gordon solic, who tell me they have about 200 such cases in QLD on the books.
Its a case of trying to find if anyone was negligent and if so, who has the deepest pockets to compensate.
I do not expect that this will amount to anything and from previous experience, consumers really have almost no rights.
Therefore, the more you can educate, inform and discuss, the less likely are you to be ripped off.
There are a huge number of rip off merchants out there.
Unfortunately, we have now learned a tough lesson from our initial state of naievity and lack of experience.
I agree, it shouldn’t have to be that way.Hi Alf,
Wow, it is unbelievable how dirty and misleading tricks these advisers (salesmen) would use just to get people.
I think get a advise from your lower and if you can get this man to pay for his actions.
I can say at the moment I am frustrated with real estate agents, we have been dealing with this industry quite often and I think it stinks too. Big time!!!
Cheers
Hi Alf
I found myself in a similar position several years back after believing that the financial advisor was working towards our financial goals but soon found out he was just creaming his pockets with our hard earned dollars. We even introduced some good friends to this guy before we found out his real (rip-off) motiffs……
Bill
well a big warning is beware and trust no one. not even a financial advisor especially with property.
there is no regulation to protect you when i tried to complain no one wanted to know well none of the regulatory bodies. because it was real estate and there is very very little protection from the greedy phiranas.Hi Alf,
Ouch. Thank you for sharing the warning – I have a tendency to be a bit too trusting, educating myself through sites like this is inspiring and helpful.
As for that Cad advisor, I hope you believe in the Karma Fairy, I do, and I’m sure with help from the forum crowd she’ll smite this guy in no time, and set you and your family on a course of well-earned riches.
Happy investing,
MelAlf,
thats sounds like a nightmare, much worse than I imagined.
you may be relieved to know however than in the last 2 years there have been some major changes to the industry. cold comfort I know, but may help others.
Advisors must now disclose any kickbacks, commissions, hidden fees, conflicts of interest and the like. All advice must be in writing, and a financial services guide given. They must state the name of their company, the licences required and held, advice they are allowed to give, BEFORE any advice is given. They are required to have professional indemnity insurance, which protects clients in the event of negligence causing financial loss.
Was this “advisor” licenced, qualified and insured? Did you check?
Never use an arranged solicitor or accountant. Get independant advice.
About 3 years ago my inlaws were approached by an “advisor”. She was not an advisor at all, just a shonk marketing over-priced negative geared QLD home & land packages. I sat in the background playing on the playstation, pretending I wasnt interested. After a while though the crap got so thick I couldnt stand it and confronted the woman. I wasnt an advisor back then, but knew a scam when I saw it. The money show has warned of this type of scam many times. There were hidden fees everywhere, one in particular was a $15k fee to her for making the sale. Also outrageous interest rates were used, rental income was unrealistic and they claimed to guarantee it. I could see how unsavvy investors could get taken in by it. She didnt appear to know very much at all, except how to sell overpriced crap to people who knew even less about investing than her. She said they had a deal with a solicitor and an accountant, and would fly them up to QLD, take them straight to the site, then away to sign their life away. Obviously she had been given a one day course and sent on her way. When I queried all the fees and rates, the woman became rather hostile and rude, and I came very close to picking her up and throwing her out the door, but it was not my house so I told the father what a scumbag she was being and asked him to get her out of my sight. To my amazement she continued the sales pitch on the way to her car.
hi all
yes crashy lucky you were there these people are relentless.
The ironic part is that they realyy think they are doing good by you they will never accept that they are ripping you off.
the purchase wasnt neccessarily that bad,and to an investor who is cashed up it could seem like a good deal but for a family person who is trying to get some security for future years the risks are too great i feel. given the market is overheated at the moment i might just get out of it by selling. If theres a sudden drop in the market or interest rates rise and i get caught when they are out of the fixed term i’ll be in trouble.
When we first sent to this guy he was an unlicensed securities dealer
about a year later he changed the company name and was granted his license.
I have read about many cases where people have lost everything or come close to it. But these advisors have a very low risk of prosecution and the rewards are great for them.
I am annoyed at the fact that
the figures were manipulated to suit
lots of charts and graphs
projections questionable
us signing agreements and he moving the goal posts so to speak etcthe mistake is we thought we were paying him to look after our interests and his expertise as he is very clever he has convinced people much more intelligent and qualified than i to buy in to apartments etc.
regards
alf
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